Throughout the history of cryptocurrency, Bitcoin has been subject to extreme price fluctuations.
Thomas Lee, strategist at Wall Street and co-founder of Fundstrat Global Advisors, has developed the “Bitcoin Misery Index” to provide an indication to the investors about the appropriate time to buy Bitcoin.
Throughout the history of cryptocurrency, Bitcoin has been subject to extreme price fluctuations. Now, according to CNBC, a “bitcoin misery index” has been developed by Wall Street strategist and co-founder of Fundstrat Global Advisors, Thomas Lee to provide an indication to the investors about the appropriate time to buy Bitcoin.
The Bitcoin Misery Index (BMI), designed as a trading tool for investors to take advantage of volatility in BTC exchanges is indicating that this is a good time to buy bitcoin.
BMI is a scale of 0 to 100 that measures bitcoin’s current price performance and volatility. This contrarian index implies that when it is low, investors should buy and when it is high, they should sell. Thus, when the bitcoin misery index falls below 27, it indicates a good time to buy, while when a number is above 67, it is a good time to sell. Accordingly, this is a good time to buy because the index at present stands at the lowest point of 18.8, since Sept. 6, 2011.
According to Lee, the stress of low points are short-term and such signals come every year. He continues to remain bullish with the prediction of bitcoin price hitting USD $20,000 by midyear and USD $25,000 by year-end. Considering the past patterns, bitcoin always rose in 12 months period as this has happened four times before when the index fell below 27, in September 2011, November 2012, January 2015 and September 2016.
Bitcoin is experiencing a hard time. On Wednesday, the trustee of the now-defunct Mt. Gox exchange reportedly sold about USD $400 million worth of bitcoin and bitcoin cash. Last week in wake of rising regulatory scrutiny, the price of bitcoin dropped 24 percent from its Monday high. The regulators are tightening their grip on bitcoin and other cryptocurrencies, like the U.S. Securities and Exchange Commission, increased its scrutiny of cryptocurrency wallets and exchanges. Moreover, two Japanese cryptocurrency exchanges were halted by the authorities and notices were issued to five others.
Lee, who was earlier chief equity strategist at J.P. Morgan Chase has urged people to wait for the next one or two or three weeks. Notably, he is the only major Wall Street strategist to issue regular bitcoin reports and formal price targets.
Compared to a year ago, bitcoin is trading 800 percent higher, however, it has lost more than 50 percent from its record high of more than USD $19,000 in mid-December 2017.
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