Key market indicators suggest the completion of Bitcoin’s stress cycle, but there is still no confidence in a market trend change.
This is reported by Finway
Decline of the Sharpe Ratio and Market Recovery Phase
Analysts at CryptoQuant have noted that the short-term Sharpe ratio for Bitcoin has dropped to around -40, which is historically considered an accumulation zone. In previous years — 2015, 2019, 2020, and 2023 — similar values coincided with the emergence of long-term entry points, indicating significant undervaluation of the asset.
“The Sharpe ratio for Bitcoin has fallen to about -40 — a historical accumulation zone, emphasized CryptoQuant.”
The second important indicator — the delta of buying/selling pressure — has also entered a recovery phase after a period of capitulation. During capitulation, this metric sharply declined, but currently, there is a gradual return to previous levels. However, the delta has not yet reached the so-called “blue zone,” which traditionally signals sustained demand from market participants. This indicates that Bitcoin is currently in a transitional period between the end of capitulation and the beginning of market recovery.
Experts emphasize that the current stage is typically characterized by the best risk-to-reward ratio for investors. At the same time, they warn that macroeconomic factors, liquidity levels, and market participant sentiment may influence the duration of this phase.
Decline in Profitability Supply and Market Phase
Analyst Darkfost points out that Bitcoin’s share of profitability is currently shrinking to levels characteristic of bearish market phases. In his view, approximately 59% of the total Bitcoin supply is currently in profit — close to the figures of the previous bearish cycle. For comparison, the historical average level of profitable positions is around 75%, while the current figure remains significantly lower.
The presence of a significant share of profitable positions is an important condition for maintaining upward market dynamics. However, even a noticeable decline in this metric does not contradict the logic of market cycles. According to historical observations, a level of 50% is typically the point of reaching a bottom during bearish phases.
The analyst also outlines a basic strategy for using this indicator: the asset is accumulated during maximum growth of losing positions, and exposure is reduced when the share of profitable positions approaches 100%. In his opinion, today’s market situation aligns more with an accumulation phase rather than a selling phase.
It is worth mentioning that recently, the number of active addresses on the Bitcoin network has dropped to its lowest levels since early 2026, reaching levels not seen in nearly eight years.