Fundstrat Global Advisors founder Tom Lee pointed out that the value currently reported by his company’s bitcoin (BTC) sentiment indicator Bitcoin Misery Index (BMI) has never been seen in a bear market. Lee made his comments during an interview with Cointelegraph published on April 19.
During the interview, Lee noted that through 2018, the BMI has not been over 50, while it now recently touched a value of 89. According to Lee, values over 67 have never taken place in a bear market.
Lee concluded:
“It means that a bull market is likely starting.”
Still, he also explained that when the indicator reported such a high value, “six out of six times, there was a drawdown in the market.” Lee claims the drawdown averaged to 25% in such instances, and that in the short term, the market could see a headwind. Moreover, he also stated that this could also mean that investors could be moving their capital to altcoins instead.
Lee also pointed out that bitcoin recently broke the 200-day moving average, which he believes means that bitcoin’s recovery is happening faster than they expected. This is in line with what he stated in mid-March, when Lee said that he thinks “the key number to watch is the 200-day moving average.”
Lee noted that this breakout could also mean that this time, the recovery won’t be different than it has been in the past, and that bitcoin could easily recover to new highs. Still, when asked if new highs for the coin will be achieved this year, Lee answered that while he believes they will be reached, he does not know when.
According to Lee, there are various reasons for the recent trend inversion in the crypto market. For instance, he mentioned that old and wealthy bitcoin wallets have recently started adding BTC, and that transaction activity has begun increasing along with crypto exchange volumes.
As Cointelegraph reported in January, the number of active bitcoin wallets, many of which have long been dormant, has seen an uptick.
Earlier this week, digital assets fund Adamant Capital published a report claiming that the cryptocurrency bear market is winding down and is in its final stage.