Authored by Ana Alexandre via CoinTelegraph.com,
Wall Street strategist and co-founder of Fundstrat Global Advisors Thomas Lee has developed a ‘contrarian index’ that lets investors know how ‘miserable’ Bitcoin (BTC) holders are based on current prices, CNBC reports.
The Bitcoin Misery Index says now is the time to buy from CNBC.
The index is called the Bitcoin Misery Index (BMI) and was designed as a trading tool for investors to take advantage of volatility in BTC exchanges. BMI is calculated on a scale of zero to 100, taking into account factors such as volatility and the number of winning trades out of the total. When the indicator is low, the buying opportunity is at its best, and vice versa.
“When the bitcoin misery index is at ‘misery’ (below 27), bitcoin sees the best 12-month performance. A signal is generated about every year,” Lee explained to CNBC in a Friday report.
“When the BMI is at a ‘misery’ level, future returns are very good.”
At the moment, the Bitcoin index is at 18.8, which is an absolute minimum since Sept. 6, 2011, the report said.
Lee’s comments follow a significant cryptocurrency market fall in which BTC lost almost 27 percent just after hitting a weekly high of $11,675 on Monday, March 5. A series of negative news resulted in heightened concerns about more regulations on crypto markets.
On March 7, the US Securities and Exchange Commission (SEC) issued a statement saying that all platforms trading securities are required to register with the agency as an exchange. Additionally, Japanese authorities temporarily halted the activities of two cryptocurrency exchanges and issued “punishment notices” to seven more, as reported on March 8.
Despite Bitcoin currently trading at more than 50 percent of its December 2017 high of over $20,000, Lee has not abandoned his optimistic forecast of $25,000 by the end of 2018.
Tom Lee is known for his bullish outlooks for BTC and as the “only major Wall Street strategist to issue regular reports and formal price targets on bitcoin”, according to CNBC.
