Designing forecasting assistant of the Bitcoin price based on deep learning using the market sentiment analysis and multiple feature extraction

Abstract

Nowadays, the issue of fluctuations in the price of digital Bitcoin currency has a striking impact on the profit or loss of people, international relations, and trade. Accordingly, designing a model that can take into account the various significant factors for predicting the Bitcoin price with the highest accuracy is essential. Hence, the current paper presents several Bitcoin price prediction models based on Convolutional Neural Network (CNN) and Long-Short-Term Memory (LSTM) using market sentiment and multiple feature extraction. In the proposed models, several parameters, including Twitter data, news headlines, news content, Google Trends, Bitcoin-based stock, and finance, are employed based on deep learning to make a more accurate prediction. Besides, the proposed model analyzes the Valence Aware Dictionary and Sentiment Reasoner (VADER) sentiments to examine the latest news of the market and cryptocurrencies. According to the various inputs and analyses of this study, several effective feature selection methods, including mutual information regression, Linear Regression, correlation-based, and a combination of the feature selection models, are exploited to predict the price of Bitcoin. Finally, a careful comparison is made between the proposed models in terms of some performance criteria like Mean Square Error (MSE), Root Mean Square Error (RMSE), Mean Absolute Error (MAE), Median Absolute Error (MedAE), and coefficient of determination (R2). The obtained results indicate that the proposed hybrid model based on sentiments analysis and combined feature selection with MSE value of 0.001 and R2 value of 0.98 provides better estimations with more minor errors regarding Bitcoin price. This proposed model can also be employed as an individual assistant for more informed trading decisions associated with Bitcoin.

Prediction of Cryptocurrency Price using Time Series Data and Deep Learning Algorithms

“…Additionally, the sharp variations in bitcoin prices have emerged as a brand-new worldwide concern. Therefore, it is crucial to foresee changes in the price of Bitcoin [15]. Because of this, investors need a forecasting strategy to efficiently capture swings in the price of cryptocurrencies to reduce risk and boost profits [16] .…”