While Bitcoin completed February with a loss of nearly 15 percent, investors’ expectations for recovery are noteworthy, especially as we enter March. However, analyzes indicate that losses have not yet reached the bottom in the light of historical data.
Sharpe Ratio and Market Dynamics
The Sharpe ratio, which measures the risk-adjusted return on cryptocurrency investments, has fallen to levels seen in the bottom periods of past cycles. This data shows that investors face relatively lower risk in Bitcoin purchases. However, when the cycles of past years are examined, it is seen that this indicator can remain at low levels for a long time.
Joao Wedson, founder of Alphractal, thinks investors should be patient and that it may be premature to take positions before seeing five to seven recurrences of the annual Sharpe ratio indicator on the chart. According to Wedson, in this process, Bitcoin is likely to decline to the range of $ 48,000 to $ 52,000, and a similar picture has occurred in the past.
“Buying Bitcoin now is better than most people who bought in the last six months, but the risk is still moderate,” said Joao Wedson.
Unrealized Loss Data and Investor Behavior
Axel Adler Jr., an analyst at Blockchain data analysis company CryptoQuant, states that Bitcoin’s unrealized loss rate has reached 39 percent. This ratio shows that the majority of investors hold their Bitcoin at a loss. However, historical charts show that this rate often exceeds 60 percent at market bottoms.
Axel Adler Jr points out that “a stage of complete capitulation has not yet been reached.”
These indicators indicate that the pressure in the market may still increase and sales may accelerate. It is considered a possibility that panic sales will increase, especially as the loss grows.
Whale Activity and Market Grouping in Stock Exchanges
In another analysis, market expert CW emphasizes that the whale rate in cryptocurrency exchanges has reached an all-time high. It is reported that with the recent price drop, small investors have largely withdrawn from the market, while larger and experienced investors continue to trade.
This development means that the Bitcoin price may approach bottom levels during periods when whales are decisive on capital flows. Historically similar rates have paved the way for the beginning of serious recoveries in the past.
When all these indicators combine, the possibility of a bottom formation in the Bitcoin price in March comes to the fore. However, increasing tensions, especially between the USA, Israel and Iran, increase volatility and unpredictability in the markets. For this reason, March may be difficult for small investors.
