2026-01-07 02:25:00

The recent market movements have been quite interesting. Bitcoin is slowly creeping up between $92,000 and $95,000, with modest gains and decent trading volume, while Ethereum is fluctuating slightly around the $3,000 mark. It looks like both are on the rise, but there's a detail that's easy to overlook— the one-year Sharpe ratio is still in negative territory.

This is a bit unusual. In the latter half of a normal bull market, prices tend to rise quickly and steadily, with risk-adjusted returns climbing all the way up. During a bear market bottom, prices and volatility shrink together, and the market gradually re-prices risk. But now, the situation is reversed—prices are indeed rising, but the Sharpe ratio is declining. In other words, gains are inefficient and more turbulent. This wave of market activity is mainly supported by technical levels, with stop-loss triggers causing quick rebounds, and institutional and retail positions moving back and forth, rather than a significant influx of new capital genuinely entering the market. Overall, it feels like we're in a phase where the old market logic is loosening, and a new trend hasn't fully stabilized yet. The direction is being explored, but nothing is settled.

This is not a sign of a market crash. The bull-bear cycle indicator has retreated from high levels, but this looks more like a pause after rapid gains rather than the end of a bull market. Historical data shows that such situations often occur in the later stages of a bull market or during mid-cycle adjustments, rather than plunging straight into a deep bear market. The key point is that the indicator hasn't fallen into the extreme negative zone where the entire market admits defeat. Right now, it more resembles a cooling of market sentiment and a decrease in structural heat. On the macro level, liquidity is being slightly tightened, leverage is slowing down, and long-term on-chain holders remain steady. However, short-term traders are finding it increasingly difficult. This is a typical consolidation signal—prices are still fluctuating, but confidence in the future direction isn't as strong as before.

BTC0,1%

ETH-0,72%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

20 Likes

Reward
20
7
Repost
Share

Comment

0/400

SandwichDetector

· 13h ago

Is the Sharpe ratio still dropping into negative territory? That's ridiculous. Who's still chasing after such a difficult rally? The market is swinging wildly; short-term trading really can't be played anymore. Wait, is this consolidation or setting up for something? The direction feels a bit blurry. What about new funds? It seems like it's mostly institutions shifting positions. It’s not a bear market signal, but the efficiency is really poor. It doesn’t look like a typical bull market at all. Why is the price rising? The risk-adjusted return is still negative. That’s contradictory. Holding long-term without moving is the way to finally smile, but this short-term wave is really a bit risky.

View OriginalReply0

digital_archaeologist

· 23h ago

Sharpe Ratio negative and still rising? That's ridiculous. After all this fuss, it feels like I can't make any money. --- Short-term traders are crying; long-term holders are the real bosses. --- Basically, there's no new blood entering the market; it's all existing funds fighting each other. --- Midway through a bull market adjustment? It looks more like the market hasn't decided on a direction. --- Price rises while Sharpe Ratio falls; whether this buy or sell is profitable is really hard to say. --- Technical support levels hold, stop-loss triggers rebound—typical institutional harvesting retail traders' rhythm. --- Long-term holders who stay put are laughing; short-term traders are getting slapped every day. --- When will this consolidation finally break out? It's getting a bit frustrating waiting. --- No new funds have come in, yet the price is rising so steadily? It’s quite suspicious. --- Feels like waiting for some signal, but it hasn't come yet.

View OriginalReply0

GasSavingMaster

· 01-07 02:54

The fact that the Sharpe ratio is negative has been noticed by me for a long time. To put it simply, it's not rising strongly enough; it's just virtual fat. After messing around for so many days, only moving a few points, the feeling that no new money is entering the market is really obvious. Wait, could this be a trap to lure more in? I feel a bit anxious. Long-term holdings are as steady as an old dog. Those of you trading short-term really deserve to be unhappy haha. Right now, it's all about exploring. No one dares to go all-in, understand? Anyway, I'm holding on, just waiting to see if the new trend can truly stabilize. This wave isn't that exciting, but I won't die from it. Just consolidation, so be it.

View OriginalReply0

NFTBlackHole

· 01-07 02:50

Is the Sharpe ratio still increasing despite negative values? That's outrageous, it indicates that the money isn't entering aggressively enough. --- Short-term days are tough +1, stop-loss repeatedly hammered. --- Feels like technical support levels are holding, but real cash hasn't followed, no wonder it's not as exciting. --- Midway adjustment in a bull market vs. bear market signals, the boundary is indeed blurry, but as long as large on-chain holders remain steady, it shouldn't be too bad. --- Rising with a lot of turbulence and earning little, this kind of market is the most frustrating.

View OriginalReply0

GasFeeLover

· 01-07 02:49

Negative Sharpe ratio still rising? This wave is indeed a bit awkward; it looks like it's going up but actually it's just messing around.

View OriginalReply0

RektHunter

· 01-07 02:42

Whoa, the Sharpe ratio is even negative? That's outrageous, what's the point of a rise? --- Short-term traders are really suffering now, I'm just that unlucky guy. --- Wait, so is this a shakeout? Or is there really no new capital coming in? --- Market supported by technical levels is most easily knocked down; I don't think it's necessarily stable. --- I believe in mid-term bull market adjustments, but this feels more like wear and tear. --- Those with long-term holdings are living comfortably; I, as a day trader, can't hold on anymore. --- Poor price efficiency, too much fuss... sounds exhausting. --- By the way, how long can this consolidation last? When will it finally break out? --- New logic hasn't stabilized yet, and they want to rise? Dream on. --- No wonder recent market feels so awkward; turns out the indicators have been telling us all along.

View OriginalReply0

OffchainOracle

· 01-07 02:41

Is the Sharpe ratio still increasing despite being negative? That's a classic case of "false strength," with insufficient capital inflow motivation. --- This wave of market movement is like walking a tightrope. The gains are weak, and there's a lot of turbulence. Short-term traders are indeed having a tough time. --- A mid-cycle rest in a bull market is normal, but it depends on when new funds will truly follow in. It's hard to say right now. --- Wait, are you saying institutions are repositioning? Then what are retail investors doing? --- Consolidation is just consolidation. I just want to know whether it will continue to ride the wave or pull back. --- It's a bit hard to see through. The price has gone up, but it doesn't feel like it's soaring to the sky. It's exhausting. --- The Sharpe ratio is still negative, but if you ask me, this is just a shakeout. Big players are building a bottom.

View OriginalReply0