A key indicator of bitcoin (BTC) returns relative to investment risk has fallen to levels seen near past bear-market lows, signaling a potential market turning point.

Cointelegraph reported on Feb. 9 that bitcoin's Sharpe ratio fell to -10, approaching levels similar to past major downturns. The Sharpe ratio measures returns relative to risk, showing how much profit an investor earns compared with the risk taken. The lower the figure, the weaker the risk-adjusted performance.

CryptoQuant analyst Darkfost said the Sharpe ratio had entered a zone that has historically often appeared in the late stages of bear markets. He stressed that this is not a signal the bear market has ended, but an indicator showing the risk-reward structure has deteriorated to an extreme.

The drop marks the lowest level since March 2023, similar to periods seen during the 2018 to 2019 downturn and the early-2022 to 2023 downturn. In November 2025, bitcoin fell to $82,000 and the Sharpe ratio neared 0. Darkfost warned that bitcoin investment still carries high risk relative to recent returns, and that the ratio is continuing to worsen, leaving performance unattractive compared with the risk taken.

A shift of the Sharpe ratio into negative territory could suggest the possibility of a medium- to long-term market transition, but analysts see the phase potentially lasting for months and say they cannot rule out further corrections before an actual rebound.

10x Research said in a recent report that bitcoin plunged to $60,000 last week and has since rebounded to $71,000, but remains about 44 percent below its October peak of $126,000. It said overall market sentiment remains in a bear-market phase. Analysts advised that while the Sharpe ratio is nearing a historic bottom zone, investors should watch market direction a bit longer rather than make hasty judgments.