Tom Lee, Fundstrat Global Advisors’ Head of Research, introduced a Bitcoin Misery Index, or BMI, on Friday. Lee describes a BMI as a substitute for how investors feel about Bitcoin’s “price action.” It is a numerical index that ranges from 0 to 100 and incorporates a win-ratio, or commission of days that Bitcoin is up, and a upside reduction downside volatility.
[Ed note: Investing in cryptocoins or tokens is rarely suppositional and a marketplace is mostly unregulated. Anyone deliberation it should be prepared to remove their whole investment.]
The approach to perspective a BMI is identical to a Relative Strength Index (RSI) or Moving Average Convergence/Divergence (MACD) that equity technicians use to establish if a batch or Index is oversold or overbought. When a reading is low, such as tighten to or next 30 for a RSI, it tends to uncover an oversold condition. When a reading is high, tighten to or above 70 for a RSI, it tends to prove an overbought condition (see a draft during a finish of this note for these indicators as they describe to Bitcoin).
BMI flashing an oversold condition
Lee’s trigger points for Bitcoin are 27 for a Buy vigilance and 67 for a Sell signal. The BMI is now during 18.8, a lowest indicate given 16.2 in Sep 2011 .