There is also a negative side to BMI reaching levels this high. Presently, what we have is a retest of $5,000, and after two weeks of solid marching, Bitcoin buyers now face some headwinds, but this is normal considering the double-digit gains of the last few days.
Wall Street strategist and co-founder of Fundstrat Global Advisors Thomas Lee revealed on April 11 that his " Misery Index" (BMI) recently hit its highest figure since June 2016. This, as bitcoin's BMI has only surpassed 67 since 2011 during bull markets, and as there's usually a correction of about 25% after hitting its peak.
The indicator measures bitcoin's momentum based on its price and trading activity, incorporating the percentage of winning trades within it.
So why is Lee now claiming that the bull market is starting, while the index was this high (read: happy traders) on April 2?
BMI has been created to help the traders to understand the market sentiments and then organize their trading to help them make better deals. This means that the lower the Bitcoin Misery Index is, the better the buy opportunities are.
The truth is no index or scale, no matter how sophisticated or complicated they are have been able to predict the price fluctuation of the crypto space.
But most important is the conclusion that the bears might be leaving the market for the next period.
As a content writer Prashant believes in presenting complex topics in simple laymen terms.