The “bitcoin misery index” created by Wall Street strategist Thomas Lee indicates this is a good time to buy bitcoin, according to CNBC. Lee has not changed his midyear price target of $20,000 and his end year price target of $25,000 for bitcoin.
Lee, co-founder of Fundstrat Global Advisors, told CNBC’s “Fast Money” Friday that when the bitcoin misery index falls below 27, bitcoin sees its best 12-month performance. Such a signal comes about every year, the strategist said. The index now stands at 18.8 on a scale of 100, making its lowest point since Sept. 6, 2011. ee said the index offers a way to measure how happy or said you are owning bitcoin.
The index is intended as a contrarian indicator. When it is low, investors should buy. When it is high, they should sell. The index accounts for the number of winning trades from the total trades. It also accounts for volatility. At the end of last week, bitcoin’s price fell 24 percent from its Monday high following reports about rising regulatory scrutiny.
The low points signify pain, even though they are short-term signals. Long-term, Lee said the low points could point to a great entry way into bitcoin.