Despite Bitcoin (BTC) rising from $76,000 to $84,000 in the last two days, its risk-adjusted return index has decreased. Currently trading at $81,818, Bitcoin has dropped by 10% and 15% compared to seven and thirty days ago, respectively. The data analysis shows that Bitcoin’s Sharpe ratio has been declining over the past year, indicating increased volatility and decreased investment efficiency. This situation is influenced by various key factors such as changes in global monetary policies, increased market risks, and market stability despite intermittent growth, resulting in more uncertainty in Bitcoin price trends. The market instability has led investors to adopt a cautious approach, increasing selling pressure. Long-term holders continue to sell their BTC, leading to further downward pressure on Bitcoin prices. However, some indicators suggest a possible price bottom. One of these indicators is the Market Value to Realized Value (MVRV) ratio, which has recently decreased to less than 2, a level typically signaling a market price floor where buyers re-enter the market. The Bitcoin Sharpe ratio has been declining continuously since March 2024, even during periods when this digital currency set new historical highs. This indicates that with a decrease in macroeconomic factors and volatility, the possibility of Bitcoin price returning to $94,000 exists. However, if fluctuations persist, the possibility of a price drop to around $76,000 is also on the table.
