I know many friends will compare the current stage of BTC to June 2021 or February 2022. This point can indeed be seen in the 'Emotional Stress Index', as there are many similarities.
Both are in the oversold area, with the inversion of bullish and bearish emotions.
Both are close to the bull-bear transition period in the traditional 4-year cycle.
Both have experienced a significant panic-driven drop, and before this, there were some macro-negative or black swan events.
In 2021, there was 5.19, in 2025 there is 10.11; in 2022, the Federal Reserve released interest rate hike + tightening expectations, and in 2025, the US government shutdown led to liquidity shortages...
History never repeats itself, yet it is astonishingly similar! This is also an important factor that contributes to the current lack of confidence among investors. Of course, what kind of rebound strength will BTC face after stopping the decline at 8w? Will it suddenly stop again and continue to drop?
I think it is necessary to focus on the changes in the 'Emotional Stress Index' recently. After the oversold area, whether the inversion of long and short emotions will disappear and return to a dominant bullish sentiment (green line significantly above the red line) is a signal that determines the strength of the rebound.
Here, everyone can observe the differences between June 2021 and February 2022 circled in the chart to understand the meaning. If the inversion disappears and the green line completely surpasses the red line, there will be a strong rebound; while if the green line remains below the red line, even if there is a rebound, it will be weak. Currently, we see that the emotional inversion has not been completely cleared, but the severity has obviously eased, and I will update if there is better performance.
