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Bitcoin Sharpe Ratio drops into negative territory, with high volatility not matching returns.
CryptoQuant data shows that the Bitcoin Sharpe Ratio has fallen into negative territory, reaching levels seen during the market crashes of 2018-2019 and 2022, reflecting poor risk-adjusted performance. Currently, Bitcoin's price has fallen from its October 2025 all-time high of over $120,000 to around $90,000, but market volatility remains high. A negative Sharpe Ratio indicates that the returns from holding Bitcoin are insufficient to compensate for its price fluctuation risk. Historical data shows that this indicator can remain negative for several months after a sharp price decline, but it is not a bottom signal. Analysts point out that a rebound of the Sharpe Ratio to positive levels is usually associated with the start of a bull market, but there are no signs of this at present.