Bitcoin Sharpe Ratio Flips Into Negative Territory— Is The Recovery Back On?

The price of Bitcoin seems to be positioning for a renewed bullish phase following its positive start to the new year. The premier cryptocurrency closed 2025 with a range-bound price performance, recording no significant movement in the past month of December. However, beneath this early price strength, recent on-chain evaluation reveals that Bitcoin may be at a critical point, where positive price action contrasts with underlying market dynamics.  Negative Ratios Don’t Mean Price Bottoms: Alphractal CEO Alphractal CEO Joao Wedson recently took to X to explain what a negative Sharpe Ratio could mean for the Bitcoin price. For context, the Bitcoin Sharpe Ratio is a metric that measures how efficiently Bitcoin’s returns compensate investors for the level of volatility (risk) taken over a given period.  Related Reading: Bitcoin Data Shows Aggressive Sellers In Control As BTC Consolidates Below $90K Readings above 1 from this metric signal a healthy market, where investors are gettin