Inverness had only lost to Motherwell and Celtic before the winter break before suffering two defeats in four days.
But their Scottish Communities League Cup semi-final loss to Hearts came after a penalty shoot-out and they were seconds away from taking a point from finalists St Mirren in Paisley on Wednesday.
Butcher has been satisfied with their performances and was further boosted by keeping key players such as Billy McKay and Andrew Shinnie during the transfer window despite receiving some deadline-day offers.
And Butcher will travel to Kilmarnock for the William Hill Scottish Cup fifth round clash in defiant nature.
The former England captain said: "The mood's been very good and I'm really disappointed with some of the press reports about a dip or a drop in form.
"These people haven't been anywhere near the games because anyone who saw us on Saturday, and particularly against St Mirren on Wednesday, would say that these boys are doing all right.
"They are playing well, we just haven't got the results, especially on Wednesday, we didn't get the result our performance deserved.
"It's not a drop in form by any standards and the players will laugh at that because they are playing good football.
"Some of the football we played on Wednesday was some of the best of the season.
"The lads are fine, there's no problem, the only thing we haven't got is results. We had that in the early part of the season when we played well and just didn't get the wins.
"We will just keep going, there's nothing wrong with the players' morale or hunger and desire.
"We have come back and played three games and played very, very well and only lost one if you consider one was on penalties."
Butcher this month brought in young players Charlie Taylor, Jordan Gibbons and Danny Devine, who made his debut at St Mirren Park, without losing any first-team regulars.
"Morale is excellent, flying and I'm delighted no players have left the club," he said.
"There was a bit of activity, one or two phone calls about one or two players from us, within the Caley Thistle squad. There was one or two ludicrous offers.
"On our front, we thought we had a player but he didn't want to come up.
"But we have done some good business over the transfer window and I'm delighted everyone is staying."
Butcher is looking to overcome the cup heartache at Easter Road by reaching the last eight of the Scottish Cup.
"The cup tie is intriguing us because it's a real good chance to roll our sleeves up and get stuck in and see if we can make progress in this cup," he said.
"We missed out on a final, it was good to get to a semi-final and all the boys know they can handle a semi-final and all that comes with it. So we want to get there again."
Midfielder Ross Draper is a doubt for the fifth-round clash against Kilmarnock after coming off with a knock during Wednesday's late defeat at St Mirren Park.
However, right-back David Raven is fit again after missing the Paisley trip.
Defenders Chris Hogg (knee) and Simon King (ankle) are working their way back from injury.
Meanwhile, new signing Sammy Clingan could be in the Kilmarnock squad for the tie.
The Northern Irishman was not involved against Celtic in midweek as he was not up to match speed but might come into contention after Lee Johnson was allowed to leave the club before yesterday' transfer window close.
Killie boss Kenny Shiels has no new injury worries.
Provisional Kilmarnock squad: Bell, Pascali, Sissoko, Hay, Fowler, O'Leary, Tesselaar, Borja, Ibrahim, Dayton, Sheridan, Heffernan, McKenzie, Racchi, McKeown, Letheren, O'Hara, Clingan, Gros, Winchester.
Provisional Inverness squad: Reguero, Meekings, Raven, Warren, G Shinnie, A Shinnie, Pepper, Draper, Tudur Jones, Doran, McKay, Cooper, Polworth, Ross, Roberts, Foran, Sutherland, Esson, Devine, Taylor, Gibbons.