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Sentiment-Driven Cryptocurrency Price Prediction: A Comparative Analysis of AI Models
Blekinge Institute of Technology, Faculty of Computing, Department of Computer Science.
Blekinge Institute of Technology, Faculty of Computing, Department of Computer Science.
2023 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

Background: In the last few years, there has been rapid growth in the use of cryptocurrency, as it is a form of digital currency and was developed using blockchain technology, so it is almost impossible to counterfeit cryptocurrency. Due to these features, it has attracted a lot of popularity and attention in the market. There has been a research gap in predicting accurate cryptocurrency prices by using sentiment analysis. This study will use Artificial Intelligence-based methods and sentiment analysis to develop a model for predicting cryptocurrency prices. By using the mentioned methods in this thesis, the developed model will provide precise results.

Objectives: The objective of the thesis is to compare artificial intelligence models for cryptocurrency price prediction and analyze the importance of sentiment analysis by understanding the public pulse in cryptocurrencies and how it affects price fluctuations, analyzing the correlation within news articles, social media posts, and price fluctuations, as well as evaluating the model performance by employing metrics like RSME, MSE, MAE, and R2 error.

Methods: The thesis follows the use of a systematic literature review along with an experimental model for comparing artificial intelligence models. Sentiment analysis played a crucial role in understanding market dynamics. By using linear regression, random forest, and gradient boosting algorithms artificial intelligence models are built to predict cryptocurrency prices using sentiment analysis. The developed models are then compared using performance metrics. This research has analyzed and evaluated each model's performance in predicting cryptocurrency prices.

Results: The results of the systematic literature review indicated that market sentiment affects cryptocurrency prices. Prices have increased when market sentiment has been positive, whereas prices dropped when sentiment has been negative. The correlation between cryptocurrency values and market mood, however, is complicated as it depends on a variety of factors. Based on the evaluation measures, the random forest artificial intelligence model is the most accurate in predicting cryptocurrency prices after evaluating the three artificial intelligence models.

Conclusions: This study utilized sentiment analysis and artificial intelligence to forecast cryptocurrency prices. It highlighted the significance of sentiment analysis as a tool for predicting the short-term price of cryptocurrencies by demonstrating how negative sentiment is correlated with decreases in price compared to positive sentiment with price increases. However, it recognized that it was necessary to take into consideration the complexity and broad range of effects on cryptocurrency markets. Research in the future will examine comprehensive sentiment analysis methods and broadening data sources.

Place, publisher, year, edition, pages
2023.
Keywords [en]
Artificial Intelligence, Cryptocurrency Prices, News Articles, Sentiment Analysis, Social Media Posts. ii
National Category
Computer Sciences
Identifiers
URN: urn:nbn:se:bth-25670OAI: oai:DiVA.org:bth-25670DiVA, id: diva2:1815778
Subject / course
DV1478 Bachelor Thesis in Computer Science
Educational program
DVGDT Bachelor Qualification Plan in Computer Science 60.0 hp
Supervisors
Examiners
Available from: 2023-12-04 Created: 2023-11-29 Last updated: 2023-12-04Bibliographically approved

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CiteExportLink to record
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