On-chain analyst Murphy argues that the short-term BWTS (Behavior-Weighted Trend Signal) offers a disciplined read on true hodler selling pressure and capitulation. By integrating loss timing with the duration of BTC holdings, BWTS provides a quantitative gauge of momentum shifts, informing risk management and timing decisions for market participants.
Historically, divergences between the BWTS (red line) and BTC price (black line) have signaled de-risking and the clearing of panic, often preceding a rebound. The May 2022 Luna incident briefly pushed BWTS away from its prior pattern, but the subsequent price action did not deliver a sustained reversal, contributing to a bear phase. The current BWTS resembles earlier setups that imply potential upside if the divergence resolves, though a rebound is not guaranteed until the pattern breaks decisively.
Traders should view BWTS as a supplementary signal within a broader toolkit of on-chain indicators and price action, with prudent risk controls.