sentiment analysis is the process by which positive, negative, and neutral sentiment that are present in a text, sentence, or phrase are identified so that the future can be predicted using sentiment analysis.
Financial markets are full of feelings of fear, worry and greed and these are the sentiment that guide the market.If most people feel positive about the market or an asset, then perhaps we should expect prices to rise, and if sentiments are negative, then we should probably expect prices to fall.
And also about the news published by the media. News has a huge impact on the market trend. Naturally, if good news is published about Bitcoin or a stock, it can help prices rise, and on the other hand, negative news can lead to a fall.
So the role of sentiment analysis is to use textual data to identify positive, negative, or neutral sentiments in written data so that the analyst can make decisions about the future.
sentiment analysis can be done manually by gathering written information, for example, when the analyst sees the phrase “bitcoin is ready to climb”, he considers it positive.
However, due to the abundance of data, sentiment analysis is usually done automatically through machine learning algorithms in programming.