Bitcoin : Are the conditions for a future bull run already met?

These are tough times for bitcoin, and for the entire crypto market. Doubt looms, wallets creak, and red candles follow one after another. So, in this rough sea, every indicator counts. It’s when analysts roll up their sleeves and scrutinize forgotten metrics, when weak signals become compasses. The Sharpe Ratio, that good old risk-return barometer, returns to the center of the stage. And when it flirts with zero, it attracts attention, especially from the big fish.

Sharpe Ratio: the shadow before the clearing in the crypto market

There are metrics that fly under the radar until they blink red. Bitcoin’s Sharpe Ratio, precisely, has just fallen to a historically low level. This metric measures what every investor fears: the return obtained per unit of risk taken. When it nears zero, it means that recent gains no longer compensate for the roller coaster of volatility.

But that’s where some smell opportunity. Analyst I. Moreno from CryptoQuant explains :

We are now entering the same zone observed in 2019, 2020, and 2022, periods during which the Sharpe Ratio remained structurally depressed for a long time before new trends emerged over several months. This does not guarantee a bottom, but it indicates that the quality of future returns is starting to improve, provided the market stabilizes and volatility normalizes. 

In plain terms? It’s ugly… but it attracts those accustomed to swimming against the tide. Those called contrarian investors, who like to buy in fear and sell in euphoria. 

Onchain shocks: when 8% of bitcoins move at once

Another figure shook the crypto community: 8% of all bitcoins in circulation were moved in just one week. Not a coincidence, not a joke. According to Glassnode, this only happened twice in the last seven years: in December 2018 and March 2020, just before violent bullish recoveries.

Joe Burnett from Semler Scientific did not mince his words :

This makes the recent drop one of the most significant onchain events in bitcoin’s history. 

And there is more: in 10 days, BTC lost 23%, nearly $24,000, before rebounding towards $89,000. No doubt, the lines are moving. And what’s happening in private wallets sometimes exceeds what candles reveal.

Whales in ambush, small holders fleeing: change of scenery on Bitcoin

The Bitcoin network shows an intriguing turnaround: wallets holding more than 100 BTC have increased by 91 addresses since November 11. Meanwhile, small holders (less than 0.1 BTC) are gradually withdrawing from the market. A redistribution that looks like a silent market takeover by big holders.

Charles Edwards, founder of Capriole, interprets this situation as a hidden opportunity: indicators like the Bitcoin Heater and the NVT suggest a clear undervaluation. Yet, some like Peter Brandt do not call victory: for him, what is observed is a simple illusion of a rebound in a fundamentally bearish trend.

Key landmarks of this historic sequence

• $87,480: Bitcoin price , after a 23% drop in 10 days;
• 8% of BTC transferred: an event as rare as it is spectacular;
• 3 occurrences of Sharpe Ratio at zero since 2019: all followed by rises;
• 91 new whales appeared in two weeks 
• 0.09: record level of the Bitcoin Heater, a sign of a market under tension.

The bitcoin market is not alone in the eye of the storm. Ethereum is also struggling to catch its breath. Despite hopes of a return towards $3,000, the disorderly arrival of new buyers makes the recovery difficult. This disorganized rush complicates the formation of solid bullish momentum. For now, caution remains advisable.