Behavior-Weighted Trend Signal Indicates Potential Bitcoin Rebound

According to BlockBeats, on-chain data analyst Murphy has highlighted the utility of the Behavior-Weighted Trend Signal (BWTS) in identifying genuine selling pressure from long-term holders and trend capitulation behavior. This indicator not only assesses whether investors are selling Bitcoin at a loss but also measures the forced liquidation of holdings that have been held for a significant period. Historical data suggests that when the BWTS (represented by a red line) diverges from the Bitcoin price (represented by a black line), it often signals the clearing of panic selling, potentially leading to a rebound or reversal in the market. Following the Luna collapse in May 2022, the BWTS, which had returned to the zero axis, diverged significantly again, breaking the previous divergence pattern. This resulted in a deeper bear market rather than a reversal. Currently, the BWTS pattern resembles previous instances, suggesting conditions for a rebound. Until the divergence is broken, it can be interpreted that the rebound may not yet be over.