While bitcoin hovers near its highest price in months, you may not have noticed a big move in Fundstrat Global Advisors’ Bitcoin Misery Index. Fundstrat head and perma-bull Thomas Lee tweeted the news on April 11: 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.
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. BMI is a contrarian indicator. It’s designed to help traders understand the market sentiment, which they can then trade against for profit.
With bitcoin’s price hugging the psychologically-important $5,000 mark 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.
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).
Maybe Crypto YouTube can shed some light? Mr. Kristof and That Martini Guy blame Julian Assange for the drop in price. CryptoCrewU crows about golden crosses leading to “legendary moves” while Alessio Rastani warns this latest rally is losing momentum. A mixed bag.