It seems that Google trends data for the term "Bitcoin" could in fact be used as a leading indicator for those holding BTC/USD for durations greater than 1 day.
Data over the last month and a half was reviewed and simplified by focusing on closing price as of 18:15 each day(Provided by Mt Gox). Price data was then normalized (Closing prices were divided by the largest closing price over the last month and a half and then multiplied by 100) for ease of comparison against Google Trends data. You can see the end result on my blog. (My noobness does not permit me to add links to my personal blog so simply Google search "Trendvesting" and I'm either the first or second search result.)
Long story short, the first instance that search volumes spike for the term "Bitcoin" would suggest selling BTC/USD and when search volumes are normalized, this would suggest going long BTC/USD.
The logic as to why search volume spikes precede depreciation in the online currency is not quite clear, but I would imagine that it has something to do with human natural tendency to be curious in face of negative events.
Topic: Google Trends SVI directly correlates the price of bitcoin (Read 1325 times)
You may say I'm comparing apples with oranges but what I found interesting is that the city of Salford in the UK with a population of less than 220,000 people within a larger conurbation of 2.2million (Greater Manchester) has a higher search and news reference volume then bitcoin - http://www.google.com/trends/?q=bitcoin,+salford&ctab=0&geo=all&date=ytd&sort=0 - Suppose it still has a long way to go 
Good argument against the allegations, that only speculative trading moves BTC prices. Cool find!
Can imagine that there is predictive value. (Depends upon data granularity though. Would not daytrade based upon solely this, but can be an indicator.)
Should comapare the two charts more exactly, even calculate Beta...
Can imagine that there is predictive value. (Depends upon data granularity though. Would not daytrade based upon solely this, but can be an indicator.)
Should comapare the two charts more exactly, even calculate Beta...
I stumbed upon this page http://www.google.com/trends/?q=bitcoin
Notice how the Search Volume Index is ridiculously close to the bitcoin price at the time?
Could this reflect the price of bitcoin for the future? with a SVI of 30 = 30 bitcoins?
Useful or useless?
Notice how the Search Volume Index is ridiculously close to the bitcoin price at the time?
Could this reflect the price of bitcoin for the future? with a SVI of 30 = 30 bitcoins?
Useful or useless?
Jump to: