Is Bitcoin Bear Market Ending? BTC Sharpe Ratio Reaches Levels ‘Historically Seen In Final Phases’

Core Insights - Bitcoin's risk-adjusted performance has entered a range historically associated with the late stages of bear markets, indicating potential further downside despite some technical indicators suggesting a possible reversal [1][3][11] Market Dynamics - Following its October all-time high, Bitcoin has faced challenges, with large holders reducing their exposure while smaller investors are buying the dip, a pattern often seen in prolonged bearish cycles [2][10] - The Sharpe ratio for Bitcoin has deteriorated, suggesting that returns are not yet attractive relative to the risks involved, indicating a continued bearish sentiment [4][11] Investor Strategies - Two potential strategies for investors have been outlined: gradually building exposure as the Sharpe ratio approaches historically lower-risk zones or waiting for a clear improvement in the ratio before increasing exposure [6] - The current phase may last several months, with the possibility of continued corrections before a true market reversal occurs [9]