Key takeaways
Why is Bitcoin’s risk-return profile weakening?
Metrics like the Sharpe Ratio and NRM have fallen as institutional demand cools.
What are Bitcoin whales doing during this phase?
While new whales face over $1 billion in losses, long-term holders have doubled their holdings.
Bitcoin’s [BTC] risk-reward tradeoff is changing.
Institutional appetite is cooling, and key performance metrics are slipping. New whale cohorts are deep in the red, too. And yet… long-time holders (LTHs) are buying, with no intent of slowing down.
Here’s the rundown.
Is BTC cooling off?
Source: Alphractal
The risk-return profile of Bitcoin is weakening. Both its annualized Sharpe Ratio and Normalized Risk Metric (NRM) have been trending lower.
This highlights a year of underwhelming performance and fading investor enthusiasm.
Source: Alphactal
According to Joao Wedson, CEO of Alphractal, this cautious phase among institutions could make way for a reset, or even a surprise move.
In a post on X (formerly Twitter), he said,
“When these metrics drop, it usually means investors aren’t very excited or confident… and that’s exactly when the market loves to catch everyone off-guard.”
Even if Bitcoin tests new highs, the most explosive part of this cycle may already be behind us.
The struggle of new money
According to CryptoQuant, newer whale cohorts are feeling the pressure. Since late October, Bitcoin has stayed below the Average Cost Basis of around $110.8K, pushing many into deep losses.
Source: CryptoQuant
Data shows this group has realized more than $1 billion in losses within days, including $515 million on the 7th of November alone. The dip is testing whale confidence, creating tension between old and new money in the market.
Whether these whales hold or capitulate could decide how BTC swings next.
LTHs are locked in
Source:X
Between the 24th of October and the 7th of November, whales holding more than 10,000 BTC more than doubled their holdings. They’ve added over 36,000 BTC in the process.
Source: X
This accumulation phase is similar to patterns seen before major market recoveries, such as in 2020. While the broader market remains cautious, these investors appear to be preparing for the long game.
Beyond all the visible volatility, Bitcoin’s strongest hands are ready for what’s next.
