The crypto market continues to grapple with a bearish trend. Despite institutional investor optimism, bulls struggle to overcome major barriers. We examine key metrics and their market impact.
Sharpe Ratio Dips
The Sharpe ratio evaluates Bitcoin's risk-adjusted return, displaying the average return after subtracting the risk-free rate per unit of volatility. The ratio has dropped below 0 after recovering from -3.064, indicating decreased risk-adjusted returns. Similar patterns were seen in 2016, 2019, 2020, and 2023, preceding consolidations or corrections.
Short-Term Holders in Panic
SPOR, or Spent Output Profit Ratio, is calculated by dividing the realized value by the token’s creation value. Values above 0 usually indicate coins sold at a profit. However, the levels have fallen below 0, meaning many short-term traders are selling at a loss. Historically, this points to capitulation but also potential recovery after selling pressure subsides.
Technical Indicators Signal Weak Momentum
Bitcoin's price struggles to rise above the ascending trend line lost in early March. Meanwhile, bearish clouds overshadow BTC's price as technicals don't support a bullish narrative. MACD is heading for a bearish crossover in the negative range, indicating declining bullish strength. The 50/200-day MA is close to a bearish crossover, hinting at potential pullback ahead. The decline in OBV also suggests waning buying interest.
Thus, amidst persistent market uncertainty, Bitcoin continues its fight to maintain positions. Key metrics indicate possible consolidation, and technical indicators point toward weak momentum. Investors remain cautious, and despite institutional positivity, a potential drop could exert pressure on the market.
