Bitcoin continues to draw attention by huge rises and drops in price. This time the crypto had significant drop to roughly $6,900 as for August 6. Nevertheless, the price has been rising since then and reached around $7,000 already, it was $8,150 on July 30, and many crypto aficionados are now worried.
However, some wise people say that there are no big reasons to jitter too much. Tom Lee, a known Fundstrat analyst, visited Fast Money on CNBC on August 6 and tried to clear up a point on what’s happening with Bitcoin. Specifically, he was asked about Bitcoin Misery Index, which is Fundstrat’s incorporate indicator.
If we go back to March, we would reveal that Fundstrat launched Bitcoin Misery Index (BMI) - an index available only to the analytical firm’s employees, aim of which is to estimate ratio of winning trades and total trades as well as Bitcoin price volatility. Simply put, the BMI demonstrates the attitude of the investor who just bought Bitcoin.
Tom Lee explained that the BMI ranges from 0 to 100, and when it falls below 27, it indicates a good condition for buying Bitcoin (it became ‘miserable’ and is good to buy). Since it has been always like roller coaster with Bitcoin, investors may anticipate the soon rise after the drop. If the BMI level is too low, it means that Bitcoin is oversold and its price is highly likely to rebound very quickly. Lee thinks if BMI is over 68, it is time to sell. Right now the level is 39 and is recovering slowly.
Lee sums up that Bitcoin “isn’t broken” since it hasn’t dropped below $6,000 yet. He thinks that people are too frightened that if Bitcoin falls too low, it will never rebound again. Still, Lee is convinced, it will recover even if the price falls under $6,000. Besides, there are some good news: BTC is still dominant and continues strengthening its position on the global market.