A ‘misery index’, a contrarian index for Bitcoin created by Fundstrat Global Advisors, is at the lowest point since September 6 2011, 18.8, signaling a buy.
The misery index ranges from 0 to 100 and whenever the index drops below 27 it is a signal that a Bitcoin price increase is ahead. The index is meant to be contrarian to depict “how happy or sad” it is to own Bitcoin so the lower it gets the more investors should expect Bitcoin to rise over the coming months and vice versa. “The last four times this was below 27…there was not a single instance with bitcoin not up 12 months later”, said Fundstrat’s co-founder, Thomas Lee.
Some factors that go into the index are the number of winning trades out of total trades along with volatility. Thomas Lee was J.P. Morgan Chase’s chief equity strategist before he founded Fundstrat and regularly issues reports and formal price targets for Bitcoin.
The nuance between price predictions and adoption
Since it was not completely revealed what goes into the misery index, it is hard to critique or accept it, but it does have strong support in historical context. There have been four times since 2011 when the misery index fell below 27 and the following months saw price increases. Historical events and economic analyses that rely on past occurrences can shed a lot of light on possible future events. However, it would be wise to not fall into the hot-hand fallacy by believing that just because an event has always happened in the past, it will continue to happen going into the future.
The past week has been very negative for cryptocurrencies with the SEC calls for registration of crypto exchanges, the possible Binance hack, and the Mt. Gox trustee liquidation report. Such a large decline over the past couple weeks is begging for a rebound, but only time will tell. Despite all the negative news, development teams will continue their work to improve networks and solve scalability problems. Merchants still continue to accept crypto for goods and services and people continue to earn income in cryptocurrency. While futures and indexes help smooth out price movements, it is, however, the developers and users that are making products and services that will secure the future of cryptocurrencies and thus their prices.
Dash is building the foundations to become a cryptocurrency not just about price
Dash development teams have been working hard to not only release Evolution, but also to continuously better the Dash network. Dash teams are constantly working to introduce Dash to those that do not have the time to discover it on their own. The even larger community around Dash work energetically to better the product in any way possible, whether it is simply using Dash or talking about Dash with friends.
As prices fluctuate, Dash is focusing on building out its network to allow people to become independent from banks and deficient national currencies. Dash is trying to find the best way to become a decentralize trustless network for anyone in the world to send money to anyone else in the world in minutes for extremely low fees. Prices are a great indicator of value, but it is not the only indicator, especially for a relatively new technology. Undeterred by price, Dash perseveres to develop and spread to help people around the world, which ironically, will actually bolster its price with unambiguous use cases.