Bitcoin Misery Index (BMI)

What Is the Bitcoin Misery Index (BMI)?

The Bitcoin Misery Index (BMI) is a measurement of Bitcoin's price action. It goes from 0 to 100 and uses contrarian economic indicators — in which opportunities move inverse of conventional indicators. It incorporates several different market factors like win ratios and volatility.

Understanding the Bitcoin Misery Index (BMI)

The BMI was made in 2018 by Tom Lee, a fellow benefactor of Fundstrat Global Advisors. The index incorporates the percentage of winning trades to total trades and volatility. It shows a value of zero to 100. The index specifies "misery" when the value is below 27, and that means that traders are not content with the aftereffects of their trades. As a contrarian index, the nearer the index is to zero, the stronger the signal to "buy" becomes. It is a "buy" signal since traders accept prices may not go any lower and that profitable trades are on the horizon.

Price History

Interest in Bitcoin (BTC) increased decisively in 2016, with BTC price rising 123% by the end of the year. By 2017, investors were filling BTC, pushing the price to just under $20,000 in December. Investors who expected Bitcoin prices to proceed with their fleeting rise after December 2017 were met rather by a decline of more than half.

Bitcoin's prevalence kept on becoming through 2018, 2019, and 2020. In 2021, its price soar to $69,000 in November before diving to around $35,000 in January 2022.

Dangers to Bitcoin Profitability

As interest in Bitcoin has risen, so too have dangers to its stability. Therefore, several countries have prohibited or made substantial regulations targeting digital forms of money. For instance, China restricted cryptocurrency over worries of financial stability, money laundering, and fraud.

Cryptocurrency investors likewise need to deal with the possibility that their digital assets can be taken whenever stored in "hot wallets" — digital wallets that are actively associated with cryptocurrency exchanges by means of the Internet. Several exchanges have been hacked, like Mt. Gox, which lost more than $450 million, and Coincheck, which lost more than $500 million.

The vulnerability about regulatory and security has given rise to another misery index: the BMI.

Objectives of the Bitcoin Misery Index

As per Fundstrat Insight, the BMI is a proxy for investor sentiments about Bitcoin's price action. It demonstrates whether traders and investors are feeling blissful (100-67), neutral (66-28), or miserable (27-0) about prices.

Cryptocurrency trading and investing open you to several types of risk, including transaction risk, interest rate risk, leverage risk, counterparty risk, and country risk. In contrast to trading U.S. [dollars](/usd-US dollar) or euros, you need to battle with different risks made by assets in view of a decentralized ledger. Without a central bank to act as a guarantor, you might have little recourse or protection on the off chance that something turns out badly with a cryptocurrency.

The profoundly risky and speculative nature of Bitcoin investing favors the people who can rapidly dissect shifts in prices and figure out the impact of information declarations, and place buy or sell trades in like manner.

Indexes make a propensity in investors to self-satisfy predictions. If, collectively, investors accept when an index hits a specific level it signals an opportunity to buy, then they will hold on until it hits that level to begin buying.

While indexes are sometimes useful as early warning indicators of market sentiment, they are in reverse looking measures. The BMI can't foresee whether programmers will attack a cryptocurrency exchange; It will not have the option to anticipate whether the Securities and Exchange Commission (SEC) will support another U.S.- based exchange or Bitcoin-upheld security. It will just let you know what different investors and traders felt out of the blue in the past.

Features

• The index incorporates the percentage of winning trades to total trades and volatility; it is calculated on a 100 point scale where zero demonstrates maximum misery.
• The index is thought of "at misery" when the value is below 27. As a contrarian index, the nearer the index is to zero, the stronger the signal is to "buy."
• The Bitcoin Misery Index (BMI) was made in 2018 by Tom Lee, a fellow benefactor of Fundstrat Global Advisors.

FAQ

What number of Bitcoins Are Left?

As of February 2022, there are approximately 2 million Bitcoins left to be mined.

Did Bitcoin Lose Value?

Bitcoin is an unpredictable asset. Its value changes everyday; it arrived at a record price of $69,000 in late 2021, so it has dropped in value from that point forward. Nonetheless, it has increased in value over its lifetime many times over.

What Is the Bitcoin 200-Day Moving Average?

The 200-day moving average is a measure of an asset's long-term performance. For Bitcoin it measures a 200-day moving average price.