Bitcoin Sharpe Ratio Hits -38.38, Analyst Calls It Bullish
Bitcoin has touched a Sharpe Ratio extreme of -38.38 only three times before in its history—early 2015, early 2019, and late 2022—each preceding major recoveries. Market analyst Michaël van de Poppe views the current level as a bullish accumulation opportunity.
Market analyst Michaël van de Poppe posted on X that Bitcoin's short-term Sharpe Ratio has dropped to -38.38, describing the market opportunity as super bullish.
The Sharpe Ratio measures return relative to risk. A reading of -38.38 indicates investors are taking maximum losses per unit of volatility, which van de Poppe said marks a historically recognized low-risk accumulation zone.
Bitcoin is trading at ₱3,965,577 ($68,299) after gaining 0.72% in the past day. The price has fallen 45.86% from its October all-time high and dropped 23% in February alone, touching a low near ₱3,483,720 ($60,000) earlier this month.
Daily trading volume sits at ₱1.11 trillion ($19.15 billion), down 50.04% from recent levels. Market analyst KillaXBT expects Bitcoin to retrace to around ₱3,936,604 ($67,800) on Monday to fill the CME gap created over the weekend. Since 2022, CME gaps have filled 96% of the time within a maximum of two weeks.
The current -38.38 reading exceeds previous extremes in both magnitude and duration using a 30-day timeframe. After the December 2015 extreme, Bitcoin recovered from around ₱23,225 ($400) to nearly ₱1,161,240 ($20,000) over two years. The December 2019 extreme preceded a climb from $7,000 to over $60,000. The November 2022 instance occurred after Bitcoin bottomed around $16,000. Van de Poppe published his analysis on February 21.
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