Markets all around were shaken deeply, and the Volatility Index (VIX) reflected a surge unseen before 2008 and COVID-19 pandemic levels.
This global crash was precipitated by a combination of factors (Japan's Nikkei collapse, public debt levels), including rising interest rates, geopolitical tensions, and a sudden drop in consumer confidence.
Exorde’s AI-powered analysis of social media and news coverage has revealed significant trends leading up to and during the financial crash on Monday, August 5th, 2024. This analysis is based on more than 28 million social media posts & news articles, written in 80+ languages. More details about our data/sources: https://www.exordelabs.com/social-media-data
We looked at the fear & despair emotional levels on TradingView (a major social financial platform where traders share insights/predictions). We confirm a spike of fear (& related sentiment) similar to VIX’s. There has not been any moment since 2022 where we observed such a negative financial sentiment. This is a potent indicator: our data summarizes the entire platform’s sentiment (in general or by asset/market).
While social media sentiment remained relatively optimistic, news sentiment plunged into negativity, surpassing the record negativity levels of 2023–2024. This divergence highlights the differing perceptions and reactions between news outlets and social media communities.
In the weeks leading up to the crash, several warning signs were largely ignored by the market. Are we going lower? Are we going to recover soon or much later?
The key observation during this financial crash is that news articles have been much more gloomy/desperate than social media, which is rare based on Exorde’s historical data. Let’s see if this divergence remains interesting. Our data indicates a recovery in sentiment, indicating a rebound at least in the short/medium term.
By monitoring real-time sentiment on social media and news platforms, we can objectively better understand market behaviors and anticipate potential shifts. As markets continue to increase in complexity, staying informed through large-scale information pipelines & analytics is increasingly relevant.