This practice (like agochari mudra) is widely quoted in the yogic scriptures. For example, in the GherandSamhita it states: "Direct your eyes towards the middle of the eyebrows. Reflect on your real nature. This is shambhavi mudra, tl most secret of all tantric scriptures." (3: 59)
The same text devotes the next few verses to showering praise on this mudra. Among other things it says: "The man who diligently practises and knows shambhavi mudra becomes Lord Shiva himself. He becomes Narayana (Vishnu), the sustainer of all and also Brahma, the creator of the universe."
This means many things, most of which are understandable only when one knows the significance of the Hindu gods. But we can say that one of the meanings is that one can transcend the fetters of the individual ego through practising shambhavi mudra for a sufficiently long period of time. Through this one is able to expand awareness and see a significance and essence behind everything. Furthermore, one realizes that one's real nature is far more than we can normally conceive.
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