Tom Lee puts the misery index of Bitcoin at the highest level in the bear market
Renowned crypto analyst and Fundstrat analyst Tom Lee released the latest update on the so-called Bitcoin Misery Index in a simulation published on April 19. According to the analyst, bitcoin has reached new heights with the BMI Bitcoin Misery Index, where it has put new marks that have not yet occurred in the bear market.
While analytics firms differ in their market indicators, Fundstrat uses the smartly named Bitcoin Misery Index as a way to gauge investor sentiment on the leading digital currency by market value. The BMI designed for me as a way to inform investors about the relative misery of Bitcoin owners based on values such as currency price and volatility.
Bitcoin misery index
On April 2, the Bitcoin Misery Index reached 89 out of a maximum of 100 (with the upper bound linked to positive sentiments and 0 being explicit misery). According to me, Bitcoin did not once break the 50 index during 2018, despite the currency entering an extended bear market. In fact, he informed me that the price of bitcoin did not achieve the misery index more than 67 in the midst of the declining market, which gives some indications of the current state of the prices of the digital currency, which led me to say:
“The current misery index numbers mean the emerging market may start at any moment.”
However, he warned in the interview that the high values of the index of misery traditionally associated with the market decline. The values were above 67 indicators of selling BTC, despite the positive sentiment of bitcoin and its future expectations, as these rises tend to be short-lived. Values below 27 are associated with buy signals, and give some indication that the currency is falling and ready to swing in the other direction.
Market movements The index was not a complete guide to predict the movements of the market in the short term, but it was good in reference to longer trends. The last time BTC posted a score of 67 on the Misery Index was on August 14, 2017. Selling at that time would have caused investors to miss Bitcoin's epic bullish run that brought the currency to nearly $ 20,000, but It decreased during several months the currency turned bearish after the price movement has been positive throughout the year 2017.
However, the last relative decrease of the BTC in the misery index was 27 November 2018, which resulted in getting a score of 24. After the buy signal at that time it was possible that the investors were pushed to reach the relative bottom of the bitcoin currency as the currency traded near $ 3,000 - which may lead to more than 80% profits at current price levels.
According to me, BTC trading at this high level (> 67) led to a drop in the market price, as the average price drop was about 25%. He also pointed out to me that the Bitcoin price decline after a rise in an index may be investors converting their profits to alternative digital currencies, as the cycle of the digital currency market has historically followed the ups of the BTC followed by a rise in alternative currencies.
