For bitcoin, which the majority of the crypto market tends to trend with in price action, it seems bear cycles have included some big spikes in realized losses as a percentage of market cap. Notice price action when this percentage has historically been greater than 0.005 (the gray horizontal line) when using a daily interval:

To smooth it out to be more selective and remove the late June 2018 spike and November 2018 spike before “the dip finished dipping”, one could change the interval to 5-days and change the horizontal line to 0.0212, which picks up two historically great bear market buying opportunities, and two relatively recent data points:

If bitcoin price drops further from here, it will be interesting to see the magnitude of the realized loss percentage spike relative to the other data points.

The simpler metric of Network Realized Profit/Loss has similarly had notable spikes down (realized losses), although the recent spikes are much more exaggerated than those of the past. This is why denominating the formula by bitcoin's market cap might be more helpful.

I tried similarly smoothing it out by using 5-day interval and picking a point that included the dips of 2018 and 2020, but it also picked up a dip of 2021 two additional dips of 2022 that weren’t finished dipping:

If you would like to replicate the calculation of Realized Loss as % of Market Cap, here is a screenshot of the expression used to create it: