According to BlockBeats news on November 25, data from CryptoQuant shows that the Sharpe ratio of Bitcoin has fallen below 0, reaching its lowest level since the FTX collapse. Additionally, the chart shows multiple instances where the Sharpe ratio dropped to zero or near zero (in 2019, 2020, and 2022), usually accompanied by Bitcoin price bottoms or significant reversals. The Sharpe ratio is an indicator that measures the relationship between investment returns and risk, and a Sharpe ratio close to zero typically indicates that its price is highly volatile but the returns are insufficient to compensate for the risk, which often occurs at market bottoms or during capitulation (panic selling) phases.
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Analysis: Bitcoin's Sharpe Ratio has fallen below 0, which may signal a major bottom.
According to BlockBeats news on November 25, data from CryptoQuant shows that the Sharpe ratio of Bitcoin has fallen below 0, reaching its lowest level since the FTX collapse. Additionally, the chart shows multiple instances where the Sharpe ratio dropped to zero or near zero (in 2019, 2020, and 2022), usually accompanied by Bitcoin price bottoms or significant reversals. The Sharpe ratio is an indicator that measures the relationship between investment returns and risk, and a Sharpe ratio close to zero typically indicates that its price is highly volatile but the returns are insufficient to compensate for the risk, which often occurs at market bottoms or during capitulation (panic selling) phases.