Journalist
Posted:
Key Takeaways
Why is Bitcoin’s risk-return profile weakening?
Figures like the Sharpe Ratio and NRM have fallen as institutional demand cools.
What do Bitcoin whales do during this phase?
While new whales face losses of more than $1 billion, long-term holders have doubled their holdings.
Bitcoins [BTC] The relationship between risk and reward is changing.
Institutional interest is cooling and key performance metrics are declining. New whale cohorts are also deeply in the red. And yet…long time holders (LTHs) are buying with no intention of slowing down.
Here’s the overview.
Is BTC Cooling Down?
Source: Alpharactal
Bitcoin’s risk-return profile is weakening. Both the annualized Sharpe Ratio and the Normalized Risk Metric (NRM) show a downward trend.
This underlines a year of disappointing performance and declining enthusiasm among investors.
Source: Alphactal
According to Joao Wedson, CEO of Alphractal, this cautious phase at institutions could give way to a reset, or even a surprising move.
In a post on X (formerly Twitter), he said,
“When these numbers drop, it usually means that investors are not very enthusiastic or confident… and that’s exactly the time when the market likes to catch everyone off guard.”
Even as Bitcoin tests new highs, the most explosive part of this cycle may already be behind us.
The battle for new money
According to CryptoQuant, newer whale cohorts are feeling the pressure. Since late October, Bitcoin has remained below its average cost basis of around $110.8K, causing many to suffer large losses.
Source: CryptoQuant
Data shows that this group suffered more than $1 billion in losses in just a few days, including $515 million on November 7 alone. The dip is testing the whales’ confidence and creating tension between old and new money in the market.
Whether these whales hold out or capitulate could decide how BTC will fluctuate next.
LTHs are locked up
Source:X
Between October 24 and November 7, whales own more than 10,000 BTC more than doubled their belongings. They added more than 36,000 BTC.
Source:
This accumulation phase is similar on patterns that were visible before major market recoveries, such as in 2020. While the broader market remains cautious, these investors appear to be preparing for the long game.
Besides all the visible volatility, Bitcoin’s strongest hands are ready for the future.