The buying momentum for Bitcoin on Coinbase has decreased, signaling a potential further decline for the cryptocurrency. This is supported by the negative Sharpe Ratio, indicating that BTC may not generate significant gains in the short term.
The Coinbase Premium Index suggests that Bitcoin could be heading for another downturn, reflecting the buying pressure from U.S. investors, who hold a substantial amount of Bitcoin. High premium values indicate increased buying pressure, while low readings suggest a surge in sell-offs.
Recent data from the Coinbase Premium Index showed a negative trend, with many U.S. Bitcoin holders selling rather than accumulating. This could lead to a correction in Bitcoin’s price before a possible bounce back.
The Sharpe Ratio, a metric used to assess investment risk, was negative for Bitcoin, indicating that the potential reward might not justify the risk involved. However, if the ratio rises to the zero midpoint, returns for BTC could start to increase. Currently, Bitcoin’s total supply in profits stands at 87.03%, with a potential drop to 78.20% needed for a significant bounce above $75,000.
The circulation of Bitcoin has decreased, with fewer coins being transacted in a day. An increase in circulation could lead to another downward movement for Bitcoin.
Overall, the data suggests a cautious outlook for Bitcoin’s price in the short term, with potential for further declines before a possible recovery.