Wall Street Strategist creates "Bitcoin Pain Index" for traders
Thomas Lee, a Wall Street strategist and co-founder of Fundstrat Global Advisors, has developed a unique tool called the "Bitcoin Pain Index" (BMI) to help investors gauge the level of distress among Bitcoin holders based on current market prices. The BMI is designed as a trading indicator that reflects the emotional state of the market—specifically, how painful it is for long-term holders when prices drop. By analyzing factors like price volatility and the number of profitable transactions, the index provides insight into potential buying opportunities.
The BMI operates on a scale from 0 to 100, with lower values indicating greater pain for holders. When the index falls below 27, it’s considered a strong signal that Bitcoin may be poised for a significant rebound in the following 12 months. According to Lee, this “pain†level often marks a favorable entry point for investors looking to capitalize on market corrections.
As of recent reports, the BMI has dropped to 18.8, the lowest level since September 6, 2011. This comes at a time when the broader cryptocurrency market has experienced a sharp decline. After reaching an all-time high of $11,675 on March 5, Bitcoin fell by approximately 27% in a short period, triggering widespread concern over regulatory actions and market instability.
In response to these developments, the U.S. Securities and Exchange Commission (SEC) issued a statement urging all cryptocurrency exchanges to register as formal financial institutions. Meanwhile, Japanese regulators took stricter measures, temporarily halting operations at two major exchanges and issuing warnings to seven others. These regulatory moves have added to the uncertainty surrounding the crypto market.
Despite the recent downturn, Lee remains bullish on Bitcoin’s long-term potential. He continues to predict that the price could reach $25,000 by the end of 2018, even though the current price is still about 50% below the December 2017 peak of over $20,000. His optimistic outlook has made him one of the most recognized voices in the crypto space, particularly among institutional investors who rely on his analysis and forecasts.
Lee’s ability to consistently provide clear price targets and market insights has earned him a reputation as one of the few Wall Street analysts who regularly covers Bitcoin and offers concrete expectations for its future performance.
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