BlockBeats News, December 6th, On-chain data analyst Murphy stated that the short-term Behavior-Weighted Trend Signal (BWTS) can be used to identify true hodler sell-offs and trend surrender behavior. This indicator considers not only whether investors are selling BTC at a loss, but also can be used to measure the “held for a period” forced capitulation chips.
Historical data shows that whenever the BWTS (red line) and BTC price (black line) display a divergence pattern, it indicates a gradual clearing of panic selling, often leading to a rebound or reversal trend. After the May 2022 Luna Flash Crash, causing the previously returned-to-zero BWTS to once again significantly deviate, breaking the previous divergence pattern, the rebound ultimately did not turn into a reversal but further entered a deep bear phase. The current form of BWTS is similar to the past, indicating potential conditions for a rebound. Before the divergence is broken, it can be considered that the rebound is not over yet.
