On-chain analyst: The BWTS indicator shows that the conditions for a rebound are in place, but caution is needed as the divergence may be broken.

[Crypto World] On December 6, on-chain analyst Murphy shared an interesting perspective: the Short-Term Behavior Weighted Trend Signal (BWTS).

This thing isn’t just about seeing who’s losing money and selling coins. Its real strength lies in identifying those “held for quite a while but finally couldn’t take it and sold at a loss” coins. In other words, it can gauge how deep the panic sentiment really is.

Looking through historical data reveals a pattern: Every time the BWTS (red line) and BTC price (black line) diverge, it usually signals that panic selling is gradually being cleared out. What comes next? A rebound or reversal is basically on the way.

But there are exceptions. In May 2022, the Luna disaster pushed the BWTS, which had already returned to the zero axis, back into a deep pit. The previously formed divergence was completely broken, and the so-called rebound never materialized—the market went straight into a deep bear phase.

What about now? The BWTS pattern is similar to before. You could interpret this as: the technical conditions for a rebound are already in place. Or put another way—as long as the divergence pattern isn’t broken, this rebound probably isn’t over yet.

Of course, that’s assuming there’s no new black swan event.