Data doesn’t lie. After three consecutive quarters of losing positions, the risk-reward ratio has deteriorated to this extent. In many cases, new bottoms form after the past few weeks, but don’t rush to go all-in. This is talking about cycles at the weekly and monthly chart level.

🔵 The Sharpe ratio just hit extreme negative territory again, breaking below -20.

For now this remains just a brief dip since it has since recovered slightly, but this zone has historically corresponded with periods of extreme negativity on Bitcoin.

— 💡The Sharpe ratio is normally used to gauge the risk taken on an investment relative to the current return associated with market volatility. —

Logically, a negative value means the risk taken is high relative to current returns, which holds true since Bitcoin has closed its 3rd consecutive quarter in the red, with -16.1% for the latest one.

📊 Historically, we can observe that these periods of extreme pessimism on $BTC , periods that can last several weeks or months, have often corresponded with the building of a new base before a relaunch.

We’re approaching that now, and you know the meme well: it’s when nobody wants it that you need to build your position.

In any case, that’s what the data suggests, but be careful, we’re looking at a long timeframe here

#LABPlunges53PercentInTwoDays