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Analysis: Bitcoin's Sharpe Ratio has fallen below 0, which may signal a major bottom.

On November 25, according to CryptoQuant data, the Sharpe ratio of Bitcoin has fallen below 0, reaching its lowest level since the FTX collapse. Additionally, the chart shows multiple periods where the Sharpe ratio dropped to zero or close to zero (in 2019, 2020, and 2022), usually accompanied by Bitcoin price bottoms or significant reversals. The Sharpe ratio is a measure of the relationship between investment return and risk, and a Sharpe ratio close to zero typically indicates that its price fluctuations are severe, but the returns are not sufficient to compensate for the risk, which often occurs at market bottoms or during capitulation stages.

BTC-2.19%
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