Analysis: Bitcoin Sharpe Ratio Drops to Lowest Level Since March 2023, Market Turning Point Approaching

BlockBeats News, February 9, CryptoQuant analyst Darkfost stated that the bitcoin Sharpe ratio, which is used to measure risk and potential returns, has entered negative territory, a characteristic of the late bear market phase. However, this does not mean the bear market is over, but rather indicates that the risk-reward ratio is approaching an extreme point. The current bitcoin Sharpe ratio is -10, the lowest level since March 2023.

Looking back at previous data, the bitcoin Sharpe ratio dropped to low points at the end of 2022 to early 2023 and from the end of 2018 to early 2019, both of which were troughs in previous bear market cycles. The last time the Sharpe ratio fell to zero was in November 2025, when the bitcoin price also hit a local low of $82,000. The analyst noted that a negative Sharpe ratio usually signals an imminent market turning point.