Bitcoin bull Tom Lee, the only Wall Street strategist covering Bitcoin and the co-founder of Fundstrat Global Advisors, recently created a “Bitcoin Misery Index.” The index works like most sentiment indicators, and is meant to be a contrarian one. This means that when it’s low, it’s time to buy the cryptocurrency. The index ranges from 0 to 100, and is now at 18.8.
According to Tom Lee, when the misery index hits “misery” (falls below 27), bitcoin sees “the best 12-month performance.” In the past, bitcoin has experienced several bull runs after falling below the 27 mark. Its current value of 18.8 is the lowest it’s been since September 6, 2011.
The Bitcoin Misery Index takes into account several factors. Among them are the number of winning trades out of the total, and the cryptocurrency’s volatility, according to Tom Lee. He said:
“The BMI [Bitcoin Misery Index] is telling us to keep the negative headlines in perspective. When the BMI is at a ‘misery’ level, future returns are very good.”
Sourced through Scoop.it from: www.cryptoglobe.com