- James Sisco and his firm use millions of data points to predict the price of cryptocurrency assets.
- Social sentiment and attitudes can be measured in correlation to price volatility.
- Bitcoin and ether require individual analysis, while altcoins tend to follow macro trends, Sisco says.
James Sisco started his career in the Marines and then became a Naval intelligence officer. He spent more than 17 years touring the globe, leading reconnaissance missions during Operation Desert Storm, acting as a military liaison for Afghanistan’s President, and heading training missions in Africa.
Now, he’s the CEO and founder of Enodo Global, a risk advisory firm that delivers risk assessments and predictive analysis based on public opinion, including social sentiment around cryptocurrencies and the factors that impact price action.
Sisco believes data is key to predictive analysis but says the old models of collecting and analyzing information are outdated. Investment bankers and intelligence officers alike look through volumes of data, searching for indicators that might signal a move in the market or stop an attack — but it’s simpler than that, he says.
A comment made by an Afghan colleague has become the basis of what his firm now does.
“He told me just stand on the corner and the wind will tell you. And I didn’t understand what he meant. And he said, ‘people like to talk. And if you just listen to what they have to say, you’ll understand, you’ll have this great understanding.'”
Enodo Global collects and analyzes data and audio from 20 social media platforms, multiple blogs, chatrooms, memes and pictures, and RSS feeds. When it comes to crypto analysis, Sisco said his firm uses over seven million data points from around the globe in eight different languages in near real-time.
“We have a partnership with IBM and we’ve created our analysis tools based upon the best technologies available, and optimize those using our own Python language code, which really allows our sentiment analysis to be in the high 80s to low 90s percentile for accuracy,” Sisco said.
Projections are a combination of the previous month’s trend and real-time data. Sisco shared with Insider the previous month’s analysis and future projected price action for bitcoin, ether, dogecoin, bitcoin, and binance coin.
Previous 30-day sentiment and price trends
Crypto sentiment in the 30 days through July 21 was negative based on a combination of frustrations among altcoin owners. Those include not seeing portfolio increases commensurate with stable-coin valuations, investors questioning the legitimacy of numerous meme coins and new tokens entering the market, and government restrictions on bitcoin mining.
These factors increased negative sentiment by 21% on average over the 30 days between June 21 and July 21, at a pace of about 0.7% per day. This trend coincides with a decrease in altcoin valuation by 17%.
Next 30-, 60-, and 90-day projections
Altcoins are impacted by what Sisco refers to as the “herd effect,” which means they follow the price action of bitcoin. However, not all altcoins reflect the same level of correlation to bitcoin.
The price action for established coins like bitcoin and ether are not significantly influenced by macro issues due to the large volume of discussions associated with each coin. They require individual analysis to determine their price projections, Sisco notes.
One example of an event that impacted bitcoin specifically was when the World Bank announced it refused to assist El Salvador’s bitcoin implementation on June 16, causing negative sentiment to spike and resulting in a 2.57% price decrease in 24 hours. Bitcoin continued to fall by another 12.7% in the following week.
Sisco said this is because it takes time for information to spread, so there is an initial spike in negative sentiment followed by a steady decrease in pricing which correlates with how the information is disseminated across different avenues through shared articles, blog discussions, retweets, and comments.
As for altcoins and meme coins, Sisco notes that they are heavily influenced by macro trends such as the movement of bitcoin, government regulations, and key influencers like Elon Musk, which provide leading indicators for pricing. However, the level of correlation with the “herd effect” varies from each individual coin.
Current projections indicate that negative public sentiment is reaching a plateau.
Therefore, Sisco and his firm forecast no significant changes in value over the next 30, 60, or 90 days, not considering any black swan events.
For bitcoin and ether, Sisco says his firm expects to see a 5% to 7% increase within 90 days aggregated over the 30, 60 and 90-day changes, with the most increase in the first 30 days, barring any black swan events.
Based on Thursday prices, this forecast implies that bitcoin’s price end up at $33,917, ether at $2,117.85, and dogecoin $0.2005 over the period.
For altcoins, they expect to see a 1% to 3% decrease overall with dogecoin decreasing in value by 5% to 7%. Enodo estimates that dogecoin’s increased price drag is due to confusion by investors caused by the various knock-off tokens which mimic it, such as dogefather and shiba inu coin.
All the forecasts are illustrated in the chart below. Price accuracy decreases as you move further out.