Bitcoin (BTC) risk-reward has delivered a rare bullish signal as multiple metrics flip “green.”
Key points:
- Bitcoin price metrics are showing multiyear opportunities when it comes to risk versus reward.
- While not a guarantee that the BTC price bottom is in, the odds for buyers are “becoming more attractive.”
- Data is increasingly mimicking the end of the 2022 bear market.
Data from onchain analytics platform CryptoQuant confirms multiyear lows for Bitcoin’s Sharpe Ratio.
Bitcoin Sharpe Ratio offers hope for bulls
Bitcoin is more attractive as a bet in terms of risk versus reward than at any time since mid-2023.
The Sharpe Ratio, a classic economic tool used to assess an asset’s investment risk, has entered its “green” zone below zero for the first time since June that year.
“We are now entering the same zone seen in 2019, 2020, and 2022, periods where the Sharpe Ratio spent time at structurally depressed levels before new multi-month trends emerged,” CryptoQuant contributor MorenoDV wrote in one of its “Quicktake” blog posts.
“This does not guarantee a bottom, but it does indicate that the quality of future returns is starting to improve, provided the market stabilizes and volatility begins to normalize.”
Bitcoin Sharpe ratio. Source: CryptoQuant
Sharpe trends to continue lower into negative territory before reversing, taking the price with it. Its last long-term bottom came in November 2022, around two months before the end of the last crypto bear market.
Moreno thus suggested that the metric needed to begin reversing upward before users could breathe a sigh of relief.
“Bitcoin is not yet signaling trend recovery, but it is signaling that the risk-adjusted landscape is becoming more attractive for forward returns,” he stressed.
Bitcoin Heater returns to 2022
Elsewhere, another go-to BTC price metric also hinted at a similar comeback.
The Bitcoin Heater, created by quantitative Bitcoin and digital asset fund Capriole Investments, is likewise back in the green.
The metric measures “relative heat in the Bitcoin Perpetuals, Futures and Options weighted by Open Interest,” Capriole explains, and currently stands at 0.09 — its lowest level since November 2022.
“We have some big headwinds to resolve (like institutional selling), but I cannot be bearish with Heater in the deep green zone today + fundamental value across the board,” creator Charles Edwards commented in a post on X Tuesday.
“I suspect higher for at least the next week.”
BTC/USD one-day chart with Bitcoin Heater data. Source: Capriole Investments
Edwards also uploaded a chart of Bitcoin’s dynamic range network value to transaction (NVT) ratio, which now shows it as “oversold” relative to the value of onchain transactions.
Meow??? How high can the cat bounce?
— Peter Brandt (@PeterLBrandt) November 25, 2025
As Cointelegraph continues to report, various market participants remain unconvinced that the bull market can return.
Among them is longtime trader Peter Brandt, who likened BTC/USD recovering from $80,500 lows to a so-called “dead cat bounce” as part of a broader downtrend.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
