The head of research at Fundstrat says the firm’s proprietary Bitcoin Misery Index (BMI) suggests a rally may be on the horizon.
Tom Lee just shared the company’s analysis from the end of July, which predicted a summer of sideways consolidation for BTC.
According to the analysis, a drop in the BMI toward a key level of 50 points indicates Bitcoin may be set to rally between October of this year and February of 2020.
For those wondering if the Bitcoin Misery Index still is useful. It told us markets would be trendless after July.
– we shared this with our clients on July 30th. https://t.co/CWXdz1jD3i
— Thomas Lee (@fundstrat) September 9, 2019
The BMI features a scale from 0 to 100, and is designed to offer investors a look at how “miserable” Bitcoin (BTC) holders are, based on the leading cryptocurrency’s volatility and price.
Last year, Lee described the mechanics of the scale to CNBC.
“When the Bitcoin misery index is at ‘misery’ (below 27), Bitcoin sees the best 12-month performance. A signal is generated about every year. When the BMI is at a ‘misery’ level, future returns are very good.”
Bitcoin is down 0.50% at $10,208, according to COIN360 at time of publishing. Ethereum is down 0.75% at $179.37, XRP is up 0.06% at $0.2571 and Litecoin is up 2.14% at $71.42.
CoinDesk analyst Omkar Godbole says BTC is searching for direction and holding above a key support level at $10,060.
“A break below $10,060 would strengthen the bearish setup on the daily chart and could yield a drop to $9,755 (Aug.