Bitcoin Price Prediction Using Sentiment Analysis and Empirical Mode Decomposition

Abstract

Cryptocurrencies have garnered significant attention recently due to widespread investments. Additionally, researchers have increasingly turned to social media, particularly in the context of financial markets, to harness its predictive capabilities. Investors rely on platforms like Twitter to analyze investments and detect trends, which can directly impact the future price movements of Bitcoin. Understanding and analyzing Twitter sentiments can potentially provide insights into future Bitcoin price movements and can shed light on how investor sentiment affects cryptocurrency markets. In this study, we explore the correlation between Twitter activity and Bitcoin prices by examining tweets related to Bitcoin price sentiments. Our proposed model consists of two distinct networks. The first network exclusively utilizes historical price data, which is further decomposed into various components using the Empirical Mode Decomposition method. This decomposition helps mitigate the impact of irregular fluctuations on Bitcoin price predictions. Each of these components is then separately processed by Long Short-Term Memory (LSTM) networks. The second network focuses on modeling user sentiments and emotions in conjunction with Bitcoin market data. User opinions are categorized into positive and negative classes and are integrated with historical data to predict the next-day price using LSTM networks. Finally, the outputs of each network are combined to form the ultimate prediction values. Experimental results demonstrate that Twitter sentiment can effectively helps us predict Bitcoin price trends. Furthermore, to validate our proposed model, we compared it with several state-of-the-art methods. The results indicate that our approach outperforms these existing models in terms of accuracy. © 2025 Elsevier B.V., All rights reserved.