Fundstrat advisor Tom Lee is a renowned staunch believer in cryptocurrencies and has previously made correct BTC price forecasts. Now, he has developed a ‘Bitcoin Misery Index’ which allow you to calculate whether it is the ideal time to buyBbitcoin or not. Lee said in an interview with Fast Money:
The index is calculated on a scale of 0-100, and at the moment it is at 18.8, the lowest mark since 2011,
During the interview, Lee indicated that when the Bitcoin misery is at ‘misery’ (below 27), Bitcoin then sees the best 12 month performance going forward.
A Measure of How Happy (or Sad) Investors Are
Bitcoin News reports that the index measures how happy or sad an investor is with their Bitcoin. As with other sentiment indicators, the Bitcoin misery index works as a contrarian indicator. As of Friday, the index was around 18.8 on a scale of 100, “telling us that bitcoin holders are miserable right now”, said Lee in the interview. According to Lee, when the misery index is low, it is the right time for investors to purchase more Bitcoin. He explains that when this is the case, investors may experience pain in the short-term but in the long-term it could be a great entry point into the Bitcoin world.
The release of the index follows a tough week for Bitcoin. The virtual coin has lost 24 percent of its value since its high on Monday after several negative reports that increased calls for enhanced regulatory scrutiny. On Wednesday, a Hong Kong-based exchange reported that some accounts had been compromised, while the US Securities and Exchange Commission enhanced its scrutiny of exchanges and wallets.
The last four times this was below 27…there was not a single instance with Bitcoin not up 12 months later,
Lee still sticks to the prediction which he made few weeks ago, that by mid 2018 Bitcoin will once again bounce back to around $20,000 and possibly hit the $25,000 by the end of the year. “It is really uncommon to be this miserable owning bitcoin”, he said.
The analyst explained that the last few times this happened were in November 2012, January 2015 and September 2016, and Bitcoin was higher a month later each time. He expects that the index will remain low in the next 2 or 3 weeks but will then start rising again.
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What are your views on Tom Lee’s new Bitcoin Misery Index? Is he right or wrong? Leave us your opinion in the comments section.