Bitcoin Misery Index (BMI)

The Bitcoin Misery Index (BMI) is a metric developed by Fundstrat Global Advisors that measures the sentiment of Bitcoin investors. It ranges from 0 to 100, with higher values indicating a higher level of investor happiness or satisfaction. The BMI is calculated by dividing the percentage of winning trades (those that have gained in value) by the percentage of losing trades (those that have decreased in value) over a certain period, typically 30 days.

Example:

Let's say that during the past 30 days, 70% of Bitcoin trades resulted in gains and 30% resulted in losses. To calculate the BMI:

BMI = (70 / 30) * 100 = 233.33

Interpretation:

A high BMI suggests that Bitcoin investors are generally happy or optimistic about the market, as there have been more winning trades than losing trades. Conversely, a low BMI indicates that investors are unhappy or bearish, as losses have outweighed gains.

Cases:

1. If the price of Bitcoin experiences a sudden surge, leading to a higher proportion of winning trades, the BMI would likely increase, reflecting increased investor satisfaction.
2. Conversely, if Bitcoin prices decline sharply, resulting in a higher proportion of losing trades, the BMI would likely decrease, indicating decreased investor satisfaction and potentially signaling a bearish sentiment in the market.