Spent Output Profit Ratio (SOPR) is an on-chain metric used in cryptocurrency analysis to assess whether market participants are realizing profits or losses when they spend their coins. Its purpose is to provide insights into market sentiment and potential price turning points by indicating the aggregate profit or loss of all spent transaction outputs. A SOPR value greater than one implies aggregate profit, while less than one suggests aggregate loss.
Mechanism
SOPR is calculated by dividing the realized value (price at which a UTXO, or unspent transaction output, is spent) by the acquisition value (price at which the UTXO was created). Each time a cryptocurrency is moved from one address to another, it represents a “spent output.” By averaging the ratio for all coins moved within a given timeframe, SOPR reveals the collective profitability of recent transactions, offering a macro view of investor behavior.
Methodology
The methodology for utilizing SOPR involves observing its trends and specific thresholds to infer market behavior. A SOPR above 1 suggests investors are taking profits, which can indicate potential resistance, while a value below 1 implies capitulation or loss-taking, often preceding a market bottom. Adjustments like filtering out short-term holders or specific entities can refine the signal, providing a more accurate assessment of long-term investor conviction and market cycle positioning.
On-chain metrics provide a direct view of network health and capital flows, offering early signals of the fundamental pressures that precede options market volatility.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
