Twitter Attribute Classification with Q-Learning on Bitcoin Price Prediction

Aspiring to achieve an accurate Bitcoin price prediction based on people's opinions on Twitter usually requires millions of tweets, using different text mining techniques (preprocessing, tokenization, stemming, stop word removal), and developing a machine learning model to perform the prediction. These attempts lead to the employment of a significant amount of computer power, central processing unit (CPU) utilization, random-access memory (RAM) usage, and time. To address this issue, in this paper, we consider a classification of tweet attributes that effects on price changes and computer resource usage levels while obtaining an accurate price prediction. To classify tweet attributes having a high effect on price movement, we collect all Bitcoin-related tweets posted in a certain period and divide them into four categories based on the following tweet attributes: $(i)$ the number of followers of the tweet poster, $(ii)$ the number of comments on the tweet, $(iii)$ the number of likes, and $(iv)$ the number of retweets. We separately train and test by using the Q-learning model with the above four categorized sets of tweets and find the best accurate prediction among them. Especially, we design several reward functions to improve the prediction accuracy of the Q-leaning. We compare our approach with a classic approach where all Bitcoin-related tweets are used as input data for the model, by analyzing the CPU workloads, RAM usage, memory, time, and prediction accuracy. The results show that tweets posted by users with the most followers have the most influence on a future price, and their utilization leads to spending 80\% less time, 88.8\% less CPU consumption, and 12.5\% more accurate predictions compared with the classic approach.Comment: Submitted to a journa

Forecasting Bitcoin Volatility Through on-Chain and Whale-Alert Tweet Analysis Using the Q-Learning Algorithm

As the adoption of cryptocurrencies, especially Bitcoin (BTC) continues to rise in today’s digital economy, understanding their unpredictable nature becomes increasingly critical. This research paper addresses this need by investigating the volatile nature of the cryptocurrency market, mainly focusing on Bitcoin trend prediction utilizing on-chain data and whale-alert tweets. By employing a Q-learning algorithm, a type of reinforcement learning, we analyze variables such as transaction volume, network activity, and significant Bitcoin transactions highlighted in whale-alert tweets. Our findings indicate that the algorithm effectively predicts Bitcoin trends when integrating on-chain and Twitter data. Consequently, this study offers valuable insights that could potentially guide investors in informed Bitcoin investment decisions, thereby playing a pivotal role in the realm of cryptocurrency risk management