Bitcoin Price Drops Below $58K Again, BTC To Make A Comeback Says Key Metric

Samuel Edyme

10 months ago

3 mins read

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After briefly trading above $59,000 in the early hours of Tuesday, Bitcoin price has now seen a significant retracement, dropping below the $58,000 price mark once again.

However, despite this struggle to rally, a CryptoQuant analyst named Kripto Mevsimi recently shared an intriguing observation regarding Bitcoin price on the CryptoQuant QuickTake platform.

Bitcoin’s Sharpe Ratio Hits New Lows: Bullish Signal Or A Warning?

According to the analyst, Bitcoin’s short-term Sharpe ratio has dipped to levels last seen during September-October 2023. For context, the Sharpe ratio is a measure used in financial markets to assess risk-adjusted returns, helping investors understand whether the returns of an asset are worth the risk involved.

BTC Sharpe ratio amid Bitcoin price decline — Bitcoin Sharpe ratio. | Source: CryptoQuant

Mevsimi revealed that in September-October 2023, a similar drop in the Sharpe ratio was observed. This period marked a significant turning point for Bitcoin, as the top crypto rebounded strongly after the ratio hit its lows.

The current scenario, according to the analyst, could indicate a potential opportunity for those with a bullish outlook. Particularly. The dip in the Sharpe ratio might suggest that Bitcoin’s price is poised for another recovery, offering a favourable entry point for investors looking to buy into the market with a risk-adjusted strategy.

However, despite the bullish signal this metric might currently be suggesting Mevsimi cautioned:

On the other hand, a bearish interpretation could see this as an indication of sustained volatility and caution against entering the market until a clearer trend emerges.

Furthermore, the analyst explained that in 2023, the dip in the ratio coincided with the news of the Bitcoin Spot exchange-traded fund (ETF), which played a significant role in driving the market’s momentum.

This time, however, the situation might be different, as external factors like macroeconomic conditions and market sentiment will also play crucial roles in determining Bitcoin price trajectory.

Bitcoin Market Performance And Outlook

Over the past week, Bitcoin price has experienced a mixture of bulls and bears. After trading as high as above $62,000 last Friday, the asset has seen a noticeable correction, dropping below the psychological price level of $60,000.

Although Bitcoin price attempted to reclaim this level earlier today reaching a 24-hour high of $59,812, it has since been pulled down back by the bears to currently trade at a price of $57,653, at the time of writing down by 1.5% over the past day.

Bitcoin (BTC) price chart on TradingView — BTC price is moving sideways on the 2-hour chart. Source: BTC/USDT on TradingView.com

Amid this price performance, a renowned crypto analyst known as Crypto Jelle on X has commented on BTC’s latest price action, disclosing that the asset is now forming a weekly golden cross for the first time.

According to the analyst, forming this pattern in the traditional financial market is often considered bullish. However, Jelle questioned, is it possible for the pattern to work for BTC too?

#Bitcoin is forming a weekly golden cross, for the first time in its history!

The 100-week MA is crossing above the 200-week MA this week.

In traditional markets, these crossovers are considered a bullish sign; will it work for BTC too? pic.twitter.com/e6GbOfU5Uy

— Jelle (@CryptoJelleNL) September 2, 2024

Featured image created with DALL-E, Chart from TradingView

Samuel Edyme

Meet Samuel Edyme, Nickname - HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.

Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.

Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.

When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)

Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.

In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.

Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think's probably unfeasible, I've done already a hundredfold.”

PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.

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