While bitcoin hovers near its , you may not have noticed a big move in Fundstrat Global Advisors’ bitcoin Misery Index. Fundstrat head and perma-bull tweeted the news on April 11:
The bitcoin Misery Index reached 89 on 4/2. Highest reading since June 2016. Means good and bad.
Good–> Since 2011, BMI >67 only seen during bull markets. More evidence bull starting.
Bad –> BMI >67 after peak, falls ~25% = Profit taking ST.
— Thomas Lee (@fundstrat)
Key Indicator Flashes Warning Sign for bitcoin’s Price
The index, known as BMI, measures the momentum of bitcoin based on its price and trading activity. It incorporates the percentage of winning trades to total trades, as well as volatility, into a daily score measured on a scale of 0 to 100.
bitcoin is considered “miserable” when the value is below 27 and “happy” when the value is above 67. You can ignore anything in between.
On April 2, BMI spiked to 89, its highest score since June 2016—just days before bitcoin dropped almost 20% in a matter of days.
Will history repeat itself?
If BMI is accurate, it will. Maybe begins the downtrend?
BMI is a contrarian indicator. It’s designed to help traders understand the market sentiment, which they can then trade against for profit.
Happiness is not a buying opportunity. In fact, Lee recommends taking profits and buying back in at a lower price.
With bitcoin’s price and technical indicators signaling further moves up, you might want to think twice about pouring more money into bitcoin, at least for a little while.
Or not:
thanks man, just sold my house.
— ZGarden (@gardenofzin)
Lee’s Price Predictions Don’t Always Pan Out
For those who choose to throw caution to the wind, you may take solace in knowing BMI is does not predict price, it measures market sentiment. Tom Lee’s price predictions have rarely come true (though he’s not predicting price here, just direction).
It’s possible we’re in store for another move up—this is crypto, after all. , but they’re worse than Tom Lee at predicting bitcoin’s price.
Maybe Crypto YouTube can shed some light? and blame Julian Assange for the drop in price. crows about golden crosses leading to “legendary moves” while warns this latest rally is losing momentum. A mixed bag.
Some say Google trends is a better predictor. When more people search about bitcoin, price tends to go up. When fewer people search about bitcoin, price tends to go down.
As of April 12, 2019, .
Does this mean bitcoin’s price is about to dump?
Published at Fri, 12 Apr 2019 06:32:49 +0000
