BTC Sharpe ratio drops to -23, echoing past bear market bottoms

Bitcoin's Sharpe ratio has fallen to -23, a level similar to points when past bear markets formed bottoms, cryptocurrency trader Ali Martinez said on X. Martinez explained that the Sharpe ratio measures returns relative to volatility, and turns negative when investors are taking heavy losses. He said a reading of -23 may indicate not that the downtrend will continue, but that selling pressure has been largely exhausted. That, in turn, could imply relatively stronger expected returns for long-term investors entering at current levels. He added that in past bear market bottoms in 2015, 2019 and 2022, the Sharpe ratio fell to similar levels before the market moved through a final selling phase and reversed trend.