Bitcoin and other cryptocurrencies may be in recovery mode right now, but even the new Bitcoin Misery Index says now is right time to purchase the original digital currency.
Set up by a Wall Street analyst, Tom Lee of Fundstart, this index measures the amount of discontent amongst Bitcoin investors, and does a good enough job predicting a price rise. The index is scaled between 0 and 100 and is backtracked so as to compare with current levels.
And speaking of which, it is currently at 18.8 — the lowest it has been since August 2011.
This low level is seen as a good indicator that Bitcoin holders are absolutely miserable at the moment. But it is also an indicator of future profits for investors that plan on making money from market volatility, buying low and selling high.
Lee has determined that a score of 27 or lower means that investors should get in, while a sell signal occurs at 67 or higher.
The current score marks only the fifth occasion that the index has retrospectively dipped below the 27 score with the previous visit in September 2016, but only briefly. The only time the reading has been lower was in September 2011 when it touched 16.2.
The current downward selling pressure for comes at amid the revelations that one Mt. Gox trustee had liquidated almost $400 million in Bitcoin and Bitcoin Cash since December 2017 so that long suffering creditors can receive lost funds.
There’s the prospect of another $1.9 billion following, and trades like these are one of the reasons behind the reversed momentum, leading to lows that touched $5,900 in February.
Despite a volatile weekend, Lee saw his index delivering a successful buy signal on Saturday that resulted in a slight uptick from $8,400 to $9,500.
And he remains bullish on the long-term prospects of Bitcoin after the Mt. Gox moves complete, which Lee sees as a short-term concern. There are enough indications of a price point in excess of $25,000 or more by the end of the year.
Long story short?
Even the misery index is predicting a return to the highs of the past 12 months.