Fundstrat’s Tom Lee Points To ‘Bitcoin Misery Index’ As Signal To Potential Bullish Trend


Fundstrat’s Thomas Lee, a well-known bitcoin ‘permabull’, has once again hinted at a potential bitcoin bull run as shown by his sentiment index that he tweeted on Thursday, April 11.

According to the Wall Street strategist, the “Bitcoin Misery Index” (BMI) that weighs the overall crypto market outlook, reached its highest figure in nearly three years.

Lee created the BMI as a tool to measure the level of misery within the Bitcoin (BTC) community as a result of the prevailing market trend and coin volatility.

As per his latest statistics, the “miserable” index value hit a high of 89 points on April 2, the highest such level since June 2016. The BMI assigns values ranging from 100 for positive sentiment and moves lower to zero (0) for absolute gloom.

Misery Index chart from 2011-2019, showing Tom Lee’s analysis. Sourced from Tom Lee’s Twitter Account, April 11

The value of 89 indicates that bitcoin holders are happy, especially after BTC rallied to hit prices over $5,200.

Lee, who has over the last one year maintained that bitcoin’s price will spike considerably, noted that the high index could provide mixed signals. One could see further positivity injected into the market, leading to further price gains.

However, his second interpretation is that this very sentiment could portend bad news for the coin.

According to Lee, the fact that Bitcoin has reported its highest reading since June 2016 provides a mixed signal. He proposed two interpretations of the index, writing that:

He went on to post that since 2011, a BMI reading that peaked 67 had only been witnessed when Bitcoin (BTC)’s price surged during bull markets.

Nonetheless, when that Misery Index reached levels higher than 67, bitcoin experienced a price drop averaging 25 percent, as enthusiasts looked to cash in to make profits.

But commenting on the same topic, Lee argued that what the market can take away from the BMI is that reaching a figure higher than 67 provided evidence that the BTC bear market had “likely ended at $3,000.”

The Fundstrat co-founder launched the “Bitcoin Misery Index” in March last year and has since used it to gauge investor sentiment and BTC’s overall price resilience.

Bitcoin currently trades at $5,116 according to trading data collated by BTC has gained about 1.60 percent against USD in the last 24 hours.

However, it is still trading lower compared to its most recent high of $5,421 reached on April 10- the first time it crossed the $5k level in months.

Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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