Sentiment vs. Price: Identifying Divergences

"Be fearful when others are greedy, and greedy when others are fearful." – Warren Buffett.

This quote is the foundation of Sentiment Analysis. In crypto, social sentiment (Twitter, Reddit, News) often leads price action. But the most powerful signal is a Divergence.

What is a Sentiment Divergence?

It occurs when the Price of an asset and the Mood of the crowd move in opposite directions.

Case 1: Bearish Divergence (The Trap)

• Price: Making new highs (All-time highs!).
• Sentiment: Beginning to unexpected drop or flatten.
• Meaning: The hype is dying down, buying pressure is exhausted. A crash is imminent.
• Action: Tighten Stop-Losses.

Case 2: Bullish Divergence (The Opportunity)

• Price: Making new lows (Everyone is bleeding).
• Sentiment: Starting to tick up (Smart money is accumulating).
• Meaning: Sellers are exhausted. A reversal is coming.
• Action: Start a DCA Strategy to catch the bottom.

How our AI Measures Sentiment

We don't just count tweets. Our NLP (Natural Language Processing) engine analyzes:

1. Volume: How many people are talking?
2. Tone: Are they using words like "moon," "rekt," "buy," "scam"?
3. Source Authority: A tweet from Vitalik Buterin outweighs 1,000 bots.

By combining Technical Analysis with Sentiment Analysis, our Confidence Scores become exponentially more accurate.