Fundstrat advisor Tom Lee is well known for being a big believer in cryptocurrencies and has made several correct BTC price predictions last year. Lee predicted that BTC/USD markets would rally past the $10K mark as well as outperform traditional assets by the end of the year. Even though crypto-markets have been suffering from a bearish town turn over the long run Lee is still bullish.
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Lee has created a ‘Bitcoin Misery Index’ that is calculated on a scale of 0-100, and right now the index is at 18.8, the lowest it’s been since 2011 according to Lee in an interview with the broadcast Fast Money. A misery index is a method of using contrarian economic indicators and was created by the economist Arthur Okun. Lee’s misery index takes into account a variety of BTC market factors including winning trades and volatility.
“Think of this index as a way to measure how happy or sad you are owning bitcoin,” Lee explains.
When the Bitcoin Misery Index is at ‘misery’ (below 27), bitcoin sees the best 12-month performance.
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“It is really uncommon to be this miserable owning bitcoin, The last few times this happened was in November 2012, September 2016 and January 2015,”
Lee emphasizes.
And bitcoin was higher a month later — The index is telling us, it’s really tough to own it for the next week or even two weeks, three weeks — But we’re getting through this. The BMI is telling us to keep the negative headlines in perspective. When the BMI is at a ‘misery’ level, future returns are very good.
The Fundstrat advisor still firmly believes his prediction made a few weeks prior that by the middle of the year bitcoin will be once again around $20K and possibly $25,000 by year-end.
Source (https://news.bitcoin.com/the-bitcoin-misery-index-finding-an-entry-way-with-sadness/)