Indicator Overview

The Sharpe Ratio (XRP) indicator measures XRP’s risk-adjusted return by calculating the annualised excess return over a risk-free rate (fixed at 3%) divided by the standard deviation of returns, using user-selectable rolling windows (90-day, 180-day, 365-day, or 730-day). The metric is displayed on the primary axis with a dual-gradient colour scheme, red intensifying for negative values (poor risk-adjusted performance) and bright green intensifying for positive values (strong risk-adjusted performance), while XRP’s price is overlaid on a secondary logarithmic axis in white for contextual reference.

How To Use

High and rising Sharpe Ratio values (especially above 1.0–2.0) signal strong risk-adjusted outperformance, often driven by regulatory breakthroughs, banking/remittance adoption, or renewed utility narratives, creating efficient bullish conditions and attractive entry or holding opportunities, while low or negative values highlight periods where volatility dominates returns, typically during prolonged legal uncertainty, regulatory setbacks, or broad altcoin weakness. Divergences, such as XRP price surging on news while the Sharpe Ratio remains subdued, caution of short-lived momentum and potential reversals, whereas price stagnation or declines paired with a climbing Sharpe Ratio suggest building fundamental strength and upcoming sustainable rallies. Traders monitor crosses above zero for regime shifts into positive risk-adjusted territory, sustained high readings for trend validation, or drops below supports as signals to de-risk, supporting precise event-driven trading, position sizing, and cycle timing in this highly news-sensitive asset.