Abstract Background The existence of a sleep cycle in deeply unconscious patients with severe traumatic brain injury (TBI) remains unknown. Evaluating the sleep patterns of these patients may provide insights into their consciousness and help predict functional recovery. Aims and Objectives This prospective observational study aimed to assess the usefulness of monitoring the sleep cycle in the prognostication of unconscious TBI patients. Materials and Methods A purposive sampling technique was employed to include 39 patients with severe TBI (Glasgow Coma Scale [GCS] ≤ 8). The average GCS score at admission was (5.76 ± 1.65). Sleep was monitored using an actigraphy smartwatch for 4 consecutive days, (3.15 ± 2.49) days postbrain injury. Sleep cycle monitoring tool and unconscious patient outcome monitoring tool were employed. An outcome assessment was done based on the GCS score. Results Severe TBI patients exhibit intact sleep cycle (i.e., deep sleep, light sleep, and rapid eye movement sleep) despite being deeply unconscious, even in the acute stage. Total sleep duration was found to be significantly higher at a mean of 19.97 hours as compared to the mean of 8 hours as per the smartwatch reference value for normal individuals. Patients with improved sleep cycles had a higher likelihood of GCS improvement (p < 0.05). Conclusion This study is the first of its kind to demonstrate that the sleep cycle is a reliable prognostic factor for the recovery of consciousness in the acute phase of severe TBI among unconscious patients, with improvement in the sleep cycle mirroring neurological improvement.