The Bitcoin Misery Index (BMI) is used by investors as an investment tool that ranges from 0 to 100.
It is a contrarian index which is informally known as “Fear Indexes”. These indexes measure volatility, which is then used to calculate a numeric value to assess the overall sentiment of the markets. The Bitcoin Misery Index is similar to the VIX, which tracks the prices of financial options to measure volatility.
Source: Fundstrat
Here is a chart showing the signals of the Bitcoin Misery Index for the past 10 years.
It can be seen that whenever a great buy signal was seen, a sharp rally was observed soon after. The opposite can be seen when the index touched values over 67 and a reversal was seen shortly after. This is exactly what happened in December 2013 when the Bitcoin Misery Index touched 100.
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