Get trading recommendations and read analytics on Hacked.com for just $ 39 a month.
The “Bitcoin Misery Index” created by Thomas Street strategist, Thomas Lee, indicates that it’s a good time to buy Bitcoin, according to CNBC. Lee has not changed his price target of $ 20,000 for the middle of the year and his goal of $ 25,000 for bitcoin at the end of the year.
Lee, co-founder of Fundstrat Global Advisors, told CNBC’s Fast Money on Friday that when the bitcoin misery index drops below 27, Bitcoin sees its best performance over 12 months. Such a signal occurs every year, said the strategist
Lowest index since September 2011
The index now stands at 18.8 on a scale of 100, making it the lowest point since September 6, 2011.
Lee said the index offered a way to measure the degree of satisfaction or ownership of bitcoin.
The index is designed as a contrarian indicator. When it is low, investors should buy. When he is high, they should sell. The index takes into account the number of winning transactions on all transactions. It also takes into account volatility.
At the end of last week, the bitcoin price fell 24% from Monday’s high following reports of increasing regulatory oversight.
Low points mean pain, even if it is short-term signals. In the long run, Lee said the low points could indicate a good entry into bitcoin.
Which earlier models predict
The last four times the index has fallen below 27 on the bitcoin misery index, bitcoin has never failed to rise 12 months later, Lee said.
Last week was difficult for Bitcoin. A major Hong Kong stock exchange reported on Wednesday that some accounts may have been compromised. At the same time, the US Securities and Exchange Commission has intensified its review of portfolios and cryptocurrency trading. On Thursday, Japan suspended two cryptocurrency exchanges for one month and called for business improvements in five other exchanges.
It was also reported on Wednesday that the trustee of the late Mt. Gox sold about $ 400 million worth of Bitcoin and Bitcoin Cash.
Bitcoin traded more than 3.5% cheaper Friday morning, about $ 8,900. Although it remains more than 800% above what it was a year ago, it has lost more than 50% of its record of more than $ 19,000 by mid-December.
Lee said that it is very rare to be this unfortunate owner of bitcoin. The last periods were November 2012, September 2016 and January 2015.
In each case, the bitcoin was higher the following month.
Also read: Strategist Tom Lee Predicts New Historic Highs for Bitcoin in July
Lee: Hold one to three weeks
Lee said the index tells people to wait for the next two or three weeks.
He is the only major Wall Street strategist to regularly publish Bitcoin reports and formal price targets. Before co-founding Fundstrat, he was chief equity strategist at J.P. Morgan Chase.
Lee has maintained his target price of $ 20,000 for the middle of the year and his goal of $ 25,000 for bitcoin at the end of the year.
Image from Shutterstock to photo
Follow us on Telegram.