Sharpe Ratio
CapitulationThe 90-day rolling Sharpe Ratio measures Bitcoin's risk-adjusted returns. Deeply negative readings (below -3) indicate maximum pain — fast drawdowns relative to volatility. These extremes have only occurred at major cycle bottoms: 2015, 2019, and late 2022. Each time marked exhaustion and the end of selling pressure, not the start of a new collapse.
The Sharpe Ratio tells you how much return you are getting for the pain you are enduring. When it drops deeply negative, it means Bitcoin is delivering maximum pain relative to how volatile it is. These moments feel terrible, but historically they have marked the exact points where selling pressure was exhausted and recoveries began.
Methodology
Daily log returns are computed from closing prices. The Sharpe Ratio is calculated over a rolling 90-day window: mean(daily returns) / std(daily returns), then annualized by multiplying by sqrt(365). No risk-free rate adjustment is applied (excess return Sharpe), which is standard for crypto.
Zones
Last updated: 2026-03-23 | Data source: CoinMetrics Community
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