Tom Lee Says Bitcoin “Must Now Consolidate New Gain”

Bitcoin (BTC) now needs to consolidate its gains, according to the prominent investor and Wall Street strategist at Fundstrat Global Advisors. Tom Lee says that realistically, now is the period when Bitcoin (BTC) needs to consolidate the gains.

In an interview posted on October 22 on BlockTV, Lee who is a renowned Bitcoin bull, co-founder and Wall Street strategist said that the levels of ebullience back in July were all signs of an overheated market.

When pressed about the reasons for the decline, Lee said that the Bitcoin news show volatility and that the notion that sluggish uptake of Bakkt’s Bitcoin futures or a similar industry episode was to blame.

Instead, Lee referred to Fundstrat’s market sentiment tool, the Bitcoin Misery Index, which he said that had betrayed the signs of excessive ebullience among investors this July. “Realistically, Bitcoin needs to consolidate its gains, it’s made a big move at the start of this year,” he said.

The BMI – which is something that Lee designed with the main goal of informing traders of how “miserable” or optimistic Bitcoin investors are based on the coin’s price and volatility, currently assigns a value of 100 to positive sentiment and 0 to outright misery.

Tom Lee says that now is the time Bitcoin needs to shine. However, rather than consolidating its gains, Bitcoin saw a stark drop in price after the BlockTV interview, plunging below $7,800 and eventually settling around $7,400. As of press time, the coin is trading around $7,500 and is down by over 6% on its 24-hour chart.

As previously reported, Lee has in the past interpreted with high BMI optimism levels as something of a mixed signal. This April, his reading emphasized that while the positive sentiment was always necessarily a part of the run-up to a bull market, the main takeaway was that Bitcoin truly bottomed at $3,000 in crypto winter.

Back when the index was launched in March 2018, Tom Lee says that in most instances, when an indicator is low, the buying opportunity is at its best – and vice versa.

“When the bitcoin misery index is at ‘misery’ (below 27), bitcoin sees the best 12-month performance. A signal is generated about every year. When the BMI is at a ‘misery’ level, future returns are very good,” he noted.