Analyzing Basic Market Signals: 2022 Patterns Reappear in the Current Bear Cycle

In analyzing the current market dynamics, we find an interesting similarity to the patterns that occurred during the 2022 crash. On-chain data shows that the following bear market structure has two main characteristics similar to the negative cycle four years ago: the realized profit/loss indicator re-entering deep zones, and ongoing moderate selling pressure with faster loss liquidation than usual.

NRPL Indicator and Accelerated Downtrend Phase

Looknode reveals in its analysis that the Net Realized Profit/Loss (NRPL) indicator is an important barometer for understanding market behavior. Previously, during the 2021 bull market peak, this signal began to diverge from price movements, reflecting weakening new capital inflows. By 2022, NRPL consistently remained in negative territory with several periods of explosive selling pressure, indicating protocol-level loss accumulation.

This rapid decline phase is not just normal fluctuation—it reflects panic selling and concentrated loss positions spread across the blockchain network. Similar patterns are detected in subsequent market conditions, where accelerated declines occur with more aggressive loss liquidations, indicating larger ownership turnover.

Market Structure Comparison: 2022 vs. Today

When analyzing historical parallels, a key point is Q4 2022 when the market hit its actual bottom. Not at the point of the lowest NRPL indicator, but rather when prices reached new levels without further extreme declines in the indicator—this condition indicates weakening selling pressure and the clearing of distressed positions.

Today, the market structure reflects the same dynamics: NRPL has returned to negative territory, and a wave of rapid selling is occurring on a concentrated scale. These similarities are not coincidental but reflect cyclical market behavior. The more centralized market conditions with realized losses over a shorter period add relevance to this historical pattern.

When Does the True Market Bottom Signal Arrive?

Historically, rapid declines in the NRPL indicator do not necessarily mean the market bottom has been reached. However, when extreme negative values are formed and selling momentum shows weakness, it often signals that the market’s emotional limits are being approached. Faster loss liquidation combined with a more concentrated market structure suggests an important scenario: if prices hit new lows without NRPL reaching deeper negative extremes, it could be a significant bottom signal.

Analyzing current conditions through a historical lens provides investors with insights to recognize when the decline phase is entering its final stage. Slowing selling momentum while prices continue to fall often marks the real turning point—not at the peak of selling pressure, but when market emotions begin to shift toward balance.