Bitaigen Research 
Bitcoin’s current Sharpe Ratio has fallen to –10, edging close to the lows recorded during the 2018 and 2022 bear markets, indicating that its risk‑adjusted return profile is entering an abnormal zone.
According to CryptoQuant analyst Darkfost, the Sharpe Ratio—used to assess the return earned per unit of risk—has now moved into negative territory, a condition that historically tends to appear toward the end of a bear market.
In a post on X on Saturday he wrote: “The Sharpe Ratio has just entered a rather interesting range; such numbers have historically shown up in the final stages of a bear market.”
He also cautioned that this does not mean the bear market is over, “rather we are approaching a node where the risk‑to‑reward ratio becomes extreme.”
CryptoQuant’s data show that since March 2023 the Sharpe Ratio has slipped to the –10 trough. The metric measures the return Bitcoin delivers relative to the risk taken, reflecting how much reward an investor obtains for each unit of risk assumed.
*Bitcoin Sharpe Ratio at bear‑market lows. Source: Darkfost*
In this article we dissect the significance of Bitcoin’s Sharpe Ratio plunging to historic lows, combine the latest CryptoQuant data with industry viewpoints, and explore the potential turning‑point signals that this metric may be hinting at toward the tail end of the bear market. By carefully interpreting the risk‑return relationship, readers can grasp the underlying market‑shift logic. Continue reading for the full analysis.
Negative Ratio Suggests a Market Pivot
At the end of 2022 into early 2023, and again at the end of 2018 into early 2019, the Sharpe Ratio dropped to even lower values, each period coinciding with the trough of a bear market. In November 2025, when Bitcoin’s price slipped to a local low of roughly $82,000, the ratio also touched zero.
Darkfost notes, “Given the current reality, the risk of investing in Bitcoin still outweighs the returns we have observed recently.” He adds, “The ratio continues to deteriorate, indicating that Bitcoin’s performance is less attractive relative to the risk taken.” Nevertheless, he stresses that a negative Sharpe Ratio often foreshadows an approaching market pivot.
“This dynamic typically emerges right around market inflection points. We are gradually closing in on the historical reversal zone.”
A True Reversal May Take Several Months
Darkfost warns that this phase could persist for a few more months, leaving room for further adjustment before Bitcoin shows a clear reversal. Analysts at 10x Research adopted a cautious stance in their market update on Monday, stating:
“Although sentiment and technical indicators are approaching extremes, the overall downtrend remains intact. In the absence of a clear catalyst, there is no urgent need to rush into the market.”
Bitcoin fell to $60,000 on Friday last week, then rebounded to $71,000 on Monday. The analyst recalled the October peak of $126,000, pointing out that the current price is still 44 % below that high and that market sentiment remains firmly entrenched in bear‑market territory.
The above constitutes a comprehensive analysis of the Sharpe Ratio nearing historic lows, the ongoing Bitcoin (BTC) bear market, and the potential upcoming turning point. For more coverage on Bitcoin’s Sharpe Ratio hitting a historic new low, stay tuned to Bitaigen (比特根) reports.
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