Google Trends is a reference basis that some investors use to judge market trends, but is it really accurate?
Investors often use the level of public attention to judge market sentiment, with Google Trends data being an important reference indicator. This data ranges from 0 to 100 and is used to measure the “relative” search popularity of a specific keyword at a specific time and place.
The closer the value is to 100, the higher the search popularity of the keyword and the hotter the market sentiment; conversely, the closer the value is to 0, the quieter the market sentiment. This article will use Google Trends data to compare the attention changes between the current market and the bull market period in 2021.
The search popularity after BTC hit a new high this year is similar to the 2021 bull market.
Bitcoin prices had two peaks in 2021, one in mid-April at $64,800 and the other in mid-November at $69,000, followed by a new high of $73,800 in March this year after about 2 years and 3 months.
From the beginning of 2021 to now, the performance of BTC and bitcoin on Google Trends is as follows:
For BTC, during the double peak period of the 2021 bull market, the Google Trends data values reached 80 and 44 respectively. When bitcoin hit a new high this year, it reached 95, and the current data is 40.
For bitcoin, the data values during the double peak period in 2021 were 77 and 38, while the values for the new high and the current data this year are 51 and 21 respectively.
Further observation of BTC Price on Google Trends reveals that during the double peak period of the 2021 bull market, the data values were 56 and 30, while during the new high of bitcoin in March this year, the data reached 100, and is currently at 35.
This means that during the bull market, continuous new highs do not necessarily lead to a new high in search popularity (the search popularity for the second new high may not be higher than the first). In other words, if you simply judge whether the price of bitcoin has peaked based on a decrease in search popularity, it is not a highly reliable basis.
The search value for Spot Bitcoin ETF is only 1.
On the other hand, the successful listing of the US Spot Bitcoin ETF has been a major driver of this year’s new high for bitcoin. According to Google Trends data, “Spot Bitcoin ETF” reached a peak of 100 within 11 days of listing, but then the popularity dropped significantly, currently standing at 1.
However, starting from May 13th when the Spot Bitcoin ETF resumed net inflows, its search popularity has risen to 48, reflecting ongoing market interest in the Spot Bitcoin ETF.
During a bull market, high search popularity usually drives prices up, indicating increased attention and investment activity. However, in other scenarios, such as when the market experiences uncertainty or significant declines, search popularity may also increase. Throughout multiple new highs, search popularity may decrease, so investors who want a comprehensive analysis of the market need to consider other market indicators and economic factors.