Bitcoin Sharpe Ratio Hits -20, Historically Marking Price Bottom
Bitcoin's Sharpe ratio dropped to -20 on June 11, a level that historically signals a price bottom and the start of accumulation. Exchange reserves fell by 80,000 BTC since February, while long-term investors doubled their buying pace.
On June 11, Bitcoin's short-term Sharpe ratio plummeted to -20 — a level not seen since 2015. This metric, which measures risk-adjusted returns, indicates not just low profitability but maximum loss per unit of volatility. Historically, such deep negative readings have marked price bottoms and the beginning of accumulation phases, often representing a point of capitulation for many traders.
Supporting on-chain data reinforces the signal. Exchange reserves have dropped by 80,000 BTC since February to 2.71 million coins, suggesting reduced selling pressure. Meanwhile, demand from long-term investors has doubled. In the first half of June alone, accumulation addresses purchased 240,000 BTC, underscoring growing conviction among hodlers.
Source: ForkLog