Bitcoin’s Sharpe ratio has dropped to around −10, the lowest point since March 2023, indicating that investors are not receiving adequate compensation for the risk they are taking. This significant decline in the Sharpe ratio often heralds broader bear market phases, a trend historically associated with the most severe downturns in Bitcoin’s cycles. With recent market sentiment shifting towards caution amidst increased cryptocurrency volatility and macroeconomic pressures, analysts caution that this phase could endure for months with potential further downward movements before any recovery.
Bitcoin Sharpe ratio hits bear market lows at -10, sparking warnings of prolonged downturn
