Rachel Lin, CEO of SynFutures, acknowledged the Sharpe ratio’s plummet. "Each instance coincided with periods of extreme risk-off sentiment following aggressive deleveraging," she told Decrypt. "While this doesn't pinpoint the exact bottom, it has historically marked zones where forward risk-reward meaningfully improved."
"A contraction in stablecoin supply often reflects liquidity withdrawal, limiting dry powder available to support buying pressure," Ignacio Aguirre Franco, CMO at Bitget, told Decrypt. "That dynamic tends to delay recoveries until stablecoin flows stabilize and on-chain liquidity re-expands."
Jonatan Randin, senior market analyst at PrimeXBT, offered a more skeptical take on the signals' reliability. "The problem with these indicators is that there are so few historical occurrences that it's hard to draw statistically significant conclusions," he told Decrypt. "Three or four data points don't make a pattern; they make a coincidence."
Looking ahead, Randin noted that other metrics, such as market value to realized value and the spent output profit ratio, are hinting at a transfer from weak to strong hands. While this signals "accumulation," it is "not a reversal," the PrimeXBT analyst explained. "Price confirmation is what turns a potential opportunity into a real one."
