Having made a big move at the start of 2019, Bitcoin now needs to consolidate its gains, argues Fundstrat's Tom Lee.
In an Oct. 22 interview for BlockTV, Lee - a renowned Bitcoin bull, co-founder and Wall Street strategist at Fundstrat Global Advisors - said that the levels of ebullience back in July were signs of an overheated market.
When pressed as to the reasons for Bitcoin's relatively tepid trading in the aftermath of its strong summer uptick, Lee argued against the notion that sluggish uptake of Bakkt's Bitcoin futures or a similar industry episode was to blame.
Instead, he referred to Fundstrat's market sentiment tool, the Bitcoin Misery Index, which he said had betrayed signs of excessive ebullience among investors this July.
"Realistically, Bitcoin needs to consolidate its gains, it's made a big move at the start of this year," he said.
The BMI - which Lee designed with the aim of informing traders of how "Miserable" or optimistic Bitcoin investors are based on the coin's price and volatility - assigns a value of 100 to positive sentiment and 0 to outright misery.
The Index aims to assess Bitcoin's price resilience and immediate prospects.
Rather than consolidating gains, Bitcoin saw a stark drop in price after the BlockTV interview, plunging below $7,800 and eventually settling around $7,400.
This April, his reading had emphasized that while positive sentiment was always necessarily a part of the run-up to a bull market, the main - and arguably more-modest takeaway - was that Bitcoin had truly bottomed at $3,000 in crypto winter.
"When the bitcoin misery index is at 'misery', 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."
'Realistically,' Bitcoin Must Now Consolidate Yearly Gain: Tom Lee
gepubliceerd op Oct 24, 2019
by Cointele | gepubliceerd op Coinage
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