30 May Coin market flatlines, web traffic sputters
It’s got all the earmarks of a sad country music tune. My wife done left me, my dog won’t hunt, and I broke my bitcoin banjo string. I’m sittin’ smack in the middle of the bitcoin misery blues.
Investors, ICO promoters and cryptocurrency industry experts are well aware of the current cryptocurrency market or what Fundstrat Global Advisors co-founder Tom Lee calls the “Bitcoin Misery Index” (BMI).
What’s a Bitcoin Misery Index?
Fundstrat created the BMI in January 2018 as a way to measure the percentage of winning trades versus total trades as well as volatility and market sentiment.
BMI is calculated on a scale of 0 to 100 with an index number below 27 representing a “misery” point and also according to Lee, a “buy signal” for some investors. A 50 score represents neutral territory and a score of about 67 should generate a “sell signal.”
The most recent Bitcoin Misery Index chart (below) from Fundstrat’s May 24, 2018 newsletter showed a BMI score of 36, still well below neutral territory and reflected in recent bitcoin market prices which have hovered between $7,200 and $7,400.
Bitrazzi recently analyzed website traffic to seven of the largest cryptocurrency news and information websites. Traffic at these seven industry sites was down between 55% and 70% since January 2018 and the coincident crash of bitcoin prices.
The overall traffic decline was 61% between January and April 2018 on the sites which included coinmarketcap.com, coindesk.com, bitcoin.com, cointelegraph.com, etherscan.io, cryptocompare.com, and coingecko.com.
Biggest among the declines were Coin Gecko (69.5%) and Coinmarketcap.com (55.7 %).
The obvious impact of the lower traffic and drop in pageviews is lower advertising rates, stronger competition between sites for viewers and a damper on some site plans for expansion into other areas such as conferences and research.
Why is cryptocurrency interest falling?
Bitrazzi says the reasons cryptocurrency is in the misery state is primarily due to regulatory crackdowns in the US and China, bans on new ICOs in China and Korea, high-profile cryptocurrency fraud cases, and heightened concerns by investors about the impact of future regulatory issues.
There are two other important reasons for the market flatlining at the moment. The fear of missing out (FOMO) factor is now taken out of the equation. Investors now need to look more carefully at virtual currencies, ICOs, whitepapers and business plans to separate fact from fiction.
With the greed gone from the market for now, the number of naïve investors is much fewer and with less demand and lower trading volume, prices are doing just what they do in a free market.
Now, as some analysts have predicted, if institutional investors enter the cryptocurrency market, bitcoin may resume an upward trend to at least a neutral position on Tom Lee’s Bitcoin Misery Index.
Investors, blockchain developers, legitimate ICOs and cryptocurrency news sites could use a little less misery!
Author: Jeff Domansky, Managing Editor
Visuals: BMI chart via Fundstrat