Tl;DR
- Bitcoin’s risk-adjusted returns reach a critical historical level.
- Analysts warn the current rebound may be a bull trap.
- Some see parallels to the 2021-2022 bear market structure.
Bitcoin (BTC) rises to 87,372 dollars during a mild market recovery and moves back into a price area that preceded earlier rallies. Bitcoin shows an improved risk-adjusted window, although short-term noise continues to shape behavior across spot and derivatives markets.
A new readout from CryptoQuant shows that Bitcoin’s Sharpe Ratio returns to a level near zero. In past cycles, the ratio stayed depressed during phases marked by uncertainty and early risk repricing. Analysts indicate that Bitcoin now operates in an environment similar to 2019, 2020, and 2022, when the metric hovered around the same zone before multi-month trends formed.
The ratio alone does not confirm a Bitcoin bottom
It does suggest that forward returns may strengthen if volatility cools. The report also notes that investors who search for asymmetric opportunities usually find better setups in low-Sharpe periods than in euphoric high-Sharpe conditions. The pattern aligns with contrarian strategies that favor moments when risk-adjusted performance looks weak on paper yet offers future potential.
Even so, the analytics platform warns that conviction must remain measured, since short-term noise dominates until the Sharpe Ratio begins to rise. At present, Bitcoin does not signal a trend recovery, although the structure points toward a more favorable risk-adjusted profile.
“For investors who manage risk carefully, the central question is not whether to allocate, but how to build entry plans that balance long-term opportunity with near-term volatility.”
Is Bitcoin’s rebound a trap?
Several market watchers argue that short-term price movement still responds to sentiment more than structural improvement. Doctor Profit states that Bitcoin’s recent rise does not reflect real bullish strength.
According to his view, traders need to feel bullish again, and liquidity accumulates during declines. If price pushes higher for one or two weeks, traders regain confidence, and that renewed optimism becomes the moment when a new drop often begins.
He previously said Bitcoin already sits inside a bear market. He highlights a bearish divergence that developed since summer, followed by a death cross and the loss of the EMA50W for the first time in the current cycle.
He adds that the structure mirrors the 2021-2022 bearish fractal, and points to weakening bank liquidity at levels last seen during the Credit Suisse episode. He also underscores pressure on the Japanese yen, ongoing trouble for the Bank of Japan, and liquidations across trading firms after October 10.
