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Potential Bull Signal: Thomas Lee’s Bitcoin Misery Index Hits Peak Level Since 2016

Fundstrat Global Advisors co-founder Thomas Lee noted on Thursday that the “Bitcoin Misery Index” (BMI) — a metric he invented — recently hit its highest level since June 2016. This news comes via a tweet Lee published to his own account.

The BMI measures how “miserable” Bitcoin (BTC) holders are based on price and volatility on a scale of 0 (miserable) to 100 (happy). In hit tweet, Lee notes that the current BMI could be a “good or bad” indicator in terms of where Bitcoin’s price will go next, and provided two scenarios:

“Good–> Since 2011, BMI >67 only seen during $BTC bull markets. More evidence bull starting. Bad –> BMI >67 after peak, $BTC falls ~25% = Profit taking ST.”

In the second part of the tweet in the same thread, Lee claimed that “the main takeaway is that BMI reaching 67 is further evidence the bear market for Bitcoin likely ended at $3,000.” This is undeniably good news for BTC hodlers (but not so great news for anyone looking who didn’t buy at those prices).

A well-established Bitcoin bull, Lee developed the BMI in March 2018, but extended the BMI chart back retroactively to include data from before then. The highest reading on the BMI was 98 in June of 2016 — meaning holders were nearly at peak happiness with their investment — and the low was 18 in April 2018, a few months into the current “Crypto Winter.” In the chart included in his tweet, Lee notes that a sentiment under 27 is a buy signal, while anything over 67 is a sell signal.

Last week, Lee stated his belief that Bitcoin has entered a bullish trend after it broke up its 200-day moving average (MA), in an interview with Bloomberg.

On Wednesday, Bitcoin hit a multi-month high of $5,420.