"Sentiment", is one of the most important indicators of almost anything. We have tools at our disposal that can give us a great picture of a market. Some of the most important indicators, like the influx of fiat currency, are not always officially announced by exchanges or the announcement is strategically delay.
Exchange volumes have been manipulated since 2011 with wash-trading and the order books are filled with spoof orders that disappear the moment the price hits the claimed order.
A very important tool we can use in combination with the rest of our analysis arsenal is "Google Trends". This tool gives us a view of what users of the internet are looking for. We can filter by country, by dates, and also see how a search string of words is performing worldwide since 2004.
Inflation google-searches Trending in the USA
Image Source: Google Trends
This is the trend results for searches of the word "inflation" in the United States since 2004. For the first time ever since the beginning of this year, the searches for this term exploded.
This indicator explains that inflation as a term is now trending as it has reached double the search executions from the average for the past 17 years.
As explained in the introduction, this tool can't be used alone, but it is indicative of a trend forming. The search results don't mean that inflation has risen in the USA, no matter if it did. Although, it gives us proof that too many US citizens have now started looking into this term for some reason.
Of course, we know the reason and we knew about a possible rise in inflation since the pandemic hit the world in 2020.
However, this chart above explains that google-search for "inflation" has now reached critical levels and should be considered at critical levels and a cause for concern.
US Inflation Rate
Image Source: Trading Economics
And this is the reason that explains the trending results. Inflation in the US is increasing rapidly right now. Google Trends gives us the sentiment which is the US population has started worrying about inflation levels. It matches with the recent spike that has reached more than 4% for the first time in 13 years.
To have a better picture take a look at a one-year chart for inflation in the USA and the real change of inflation.
Google Trends - Search results for "Inflation" (USA/1Y)
Image Source: Google Trends
Yahoo Finance - US Inflation (1Y)
Image Source: Yahoo Finance
We observe that the first spike in searches for the term "inflation" this year, appeared when inflation levels were still low, but there had been indications of a break-out. The charts are following each other and "inflation" is currently trending in the US news and google searches.
Comparing Trends
Google Trends: Bitcoin Cash - Ethereum Comparison (Worldwide - 5Y)
Image Source: Google Trends
*Red line: Ethereum, Blue line: Bitcoin Cash.
I think that this chart is representative. While Bitcoin Cash in 2017 when compared to Ethereum was very close in the number of searches worldwide, during this bull run it remained very low and didn't move into a similar trend.
Google Trends: Bitcoin Cash - Ethereum Comparison (Worldwide - 1Y)
Zooming in the chart to get a better picture, we see interest in Ethereum spiking in November 2020 and a second wave for the term in March 2021. Bitcoin Cash searches did rise but the trend was unlike Ethereum's.
The way I read this chart it means that if the bull run resumes, Ethereum will be making new ATH very soon.
Meanwhile, Bitcoin Cash according to this chart is far from Ethereum's publicity, and probably this could indicate the reason Bitcoin Cash hasn't still performed as previously (2017) and is only 50% from its ATH, while Ethereum has outperformed the market expectations and is up 250% from ATH.
Google Trends can help a business find opportunities and understand market trends. In our examples, we have noticed a trend in rising inflation that is the outcome of FED policies to reduce the effect of the lockdown in the American economy. It was expected that inflation will rise and it took 1 year since the first stimulus package and the infinite quantitative easing planned by the FED and the US government.
The prices remained relatively low since the supply chain wasn't disrupted so much for the first year of the pandemic, however, the increase of money supply in economies has induced an inflation rally that is just in the beginning.
Google Trends is a powerful tool that not only explains but can also predict and should be used together with other indicators. As a sole indicator, it can be an outlier though, so it should be cross-referenced with other statistical and quantitative elements.
Bitcoin Cash did not have a similar to 2017 price movement in the current bull run. It didn't reach higher prices and while it performed well, it didn't reach previous all-time highs.
As we know very well, this is the result of powerful centralized crypto media that didn't give Bitcoin Cash the deserved attention, hiding news and reducing visibility. Bitcoin Cash wasn't hyped in the 2021 bull run, but the fact that it was also censored from crypto media is a concern we have to deal with.
Lead Image: Free download from Unsplash (by Chris Liverani)
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Google and other powerful search engines are surely gonna kick butts hard if world war breaks out anytime..lol