Recently, I've been keeping an eye on the BTC sentiment pressure index (SPI). This thing basically visualizes the psychological game between long positions and short positions. The green line represents the strength of long positions, while the red line is from the short positions.

In simple terms: the red line touches the floor, and the green line keeps rising higher? That is a signal for a trend to take off. However, if the price hits a new high while the green line starts to decline, this kind of divergence usually indicates that a temporary top is approaching, and long positions are retreating.

However, the focus of today's discussion is not on this, but on the "inverted" index — that is, the situation where the green line drops and sticks closely to the red line, or even the red line surpasses the green line. This pattern appears in the form of a pullback zone during the mid-stage of a bull market, and when the inversion is more severe, it occurs either when the bull market has just started or in the oversold area of the mid to late stage.

Looking back at this cycle, there were inversions in March and September 2023. At that time, the market had just crawled out of a deep bear phase, and everyone had a very fragile mentality; any slight disturbance could lead to emotional collapse. If the oversold area at the beginning of the bull market was a golden pit for cross-cycle players to go all in, then the mid-term correction area (when long positions and short positions are rebalanced) is the point where trend followers should enter with heavy positions—after all, after a strong rally, a return to rationality in prices is healthier.

Now the question arises: SPI has once again turned upside down. Clearly, we have long passed the initial stage of the bull market, so there is only one answer - this is an oversold signal in the mid to late stage.

Looking back at historical data, we find that the probability of overselling and the market sliding into a deep bear market increases as we move towards the later stages. It is essential to be especially vigilant during this phase.