Analysis shows that Bitcoin's Sharpe ratio has fallen below 0, which may indicate a major bottom signal

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 instances where the Sharpe ratio dropped to zero or close to zero, usually accompanied by Bitcoin price bottoms or significant reversals.

The Sharpe ratio is a measure of the relationship between investment return and risk. A Sharpe ratio close to zero typically indicates that its price is highly volatile, but the returns are insufficient to compensate for the risk, which often occurs at market bottoms or during capitulation phases.