Xu Bin Market: Comparing the current downturn with the 2022 crisis

StakeWhisperer · 2026-02-27T16:06:35+00:00

Recent trends in the cryptocurrency market echo the weakening cycle of 2022, particularly through key technical indicators like the Net Realized Profit/Loss (NRPL). Analyzing NRPL reveals selling pressures and can signal potential market bottoms, providing insights for future investment strategies.

StakeWhisperer

2026-02-27 16:06:35

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Recent developments in the crypto market trend indicate significant similarities with the downturn cycle that occurred in 2022. Analysis from Looknode on X shows that the current structure of the trend bin reflects key characteristics of the 2022 crisis phase, especially through important technical indicators.

Market Structure During Decline Phases

At the peak of the 2021 bull cycle, the Net Realized Profit/Loss (NRPL) indicator began to diverge from price movements, signaling weakening new capital inflows and investors starting to withdraw funds. During 2022, this indicator remained consistently in negative territory, with sharp declines reflecting panic selling and realization of on-chain losses.

Interestingly, the market bottom in Q4 2022 did not coincide with the lowest NRPL levels. In fact, prices reached new lows, but the indicator did not plunge into deeper negative territory, indicating that selling pressure was waning and many large losses had been liquidated.

NRPL Indicator and Key Signals

Currently, the trend bin structure again reflects characteristics of 2022 in two main aspects. First, the NRPL indicator has returned to deep negative zones. Second, the pace of sell-offs is accelerating, with losses being realized more quickly than in previous cycles.

Historical technical analysis suggests that rapid declines in this indicator do not always immediately signal a market bottom. However, when extreme negative values are reached and downward momentum begins to weaken, it often indicates that the market is approaching a psychological extreme.

Lessons from the Past for the Future

The increasing speed of loss realization and a more concentrated structure suggest that if prices continue to hit new lows but the NRPL indicator does not plunge into new extreme negative levels, this could be an important bottom signal. This provides investors with a tool to identify potential trend bin changes in the future when combined with other technical analyses.

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