Bitcoin Risk-Adjusted Performance Hits Worrisome Levels.
Recent data shows #bitcoin risk-adjusted performance has weakened significantly. The Sharpe Ratio has dropped to around -10, a level usually seen only during the final stages of deep bear markets. This signals high volatility but weak returns — investors are taking more risk without adequate reward.
Looking at past cycles, similar drops occurred in 2018 and 2022 bear markets, right before market bottoms. According to CryptoQuant Dark Forest, the current reading is the lowest since March 2023, highlighting extreme market stress.
In November 2025, when Bitcoin traded near $82,000, the Sharpe Ratio hit zero. Today it has fallen even lower, showing performance lagging far behind volatility. This indicates a market under pressure, with high risk and weak momentum.
A low Sharpe Ratio does not guarantee a bottom, but it does show that the market is in a sensitive, high-risk phase. Liquidity is tight, short-term traders are active, and long-term investors are cautious.
Historically, this zone has preceded either further capitulation or a strong reversal. Data, more than sentiment, should guide decisions now. Bitcoin is at a critical point that could set the stage for the next major market move.