Nov 9, 2025
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Bitcoin Sharpe Signal Turns Negative Indicating Potential Price Corrections
The price of Bitcoin has faced challenges in November, fluctuating below the $100,000 mark. Despite a current state of calm, on-chain data suggests potential short-term price corrections.
Risk-Adjusted Returns Decline for Bitcoin
- CryptoQuant's Arab Chain reports increased risks for Bitcoin investors on Binance, focusing on the Sharpe Signal metric.
- A high Sharpe Signal indicates favorable risk-reward returns, while a low or negative reading points to volatility over returns.
- Recently, the Sharpe Signal dropped to -0.277, coinciding with Bitcoin's dip to $101,747, reflecting a decline in risk-adjusted return quality.
- Previously, from July to September, the Sharpe Signal was above 0.2, aligning with positive Bitcoin momentum.
Bitcoin Price Outlook
- Despite a weakening Sharpe Signal, full-scale capitulation is not evident as trading volume remains stable.
- The decline is not driven by liquidations but indicates reduced institutional involvement, suggesting a temporary correction phase.
- If the Sharpe Signal remains negative, further short-term corrections are possible. A positive shift could signal a local price bottom.
- Currently, Bitcoin is valued at approximately $101,750, with no significant change in the last 24 hours.
