BTC Confidence Indicator Returns to Axis After 203 Days, Bear Market May Have Ended

Chain analyst Murphy pointed out that after 203 days, the Glassnode's investor's sentiment index regarding the trend has finally returned above the zero axis from the panic zone. This process went through a complete recovery path from the panic zone to the hesitation zone and then above the zero axis.

This indicator has a higher historical success rate in judging the big cycle of BTC. According to Murphy's backtest summary, in the bull market cycle, the green confidence zone corresponds to a trend trend, and the red panic zone between the two green zones is the entry window. What's more critical is that over the past decade, this index has never returned above zero in the middle of a bear stage in the deep bear market, and this time it is the first time in history.

Murphy defines "emerging from a deep bear" as not breaking new lows after the subsequent retraction. Based on this definition, the index returning above water implies that the market may have emerged from the deep bear. However, he also points out that there are two paths afterward: one is to gradually enter the green confidence zone after stabilizing according to the conventional trend, marking the market entering the bear-bull transition period; the second is the unconventional scenario where the index falls back below zero axis, implying that the repair process is not yet complete.

Even if the latter occurs, Murphy believes that it is still a positive signal. He emphasizes that a bear market is essentially an emotion that is hard to shift, and the fact that this market has reached this point in only 203 days is already a historic breakthrough.