SOPR (Spent Output Profit Ratio) Trends

Overview

Analyzes the Spent Output Profit Ratio (SOPR) to determine if cryptocurrencies are being sold at a profit or loss. This pillar offers a direct view into market sentiment and potential price reversals.

What It Does

This pillar calculates the ratio of the price at which coins are spent versus the price at which they were acquired. A SOPR value above 1.0 indicates that, on average, holders are selling at a profit, which can signal a market top. A value below 1.0 suggests holders are selling at a loss, often seen during capitulation events near market bottoms.

Why It Matters

SOPR provides a powerful measure of aggregate market psychology, cutting through the noise of derivatives and exchange order books. It helps identify periods of euphoria or fear, which are strong leading indicators of major price movements.

How It Works

The analysis begins by identifying every spent transaction output (UTXO) on the blockchain within a given timeframe. For each UTXO, it retrieves the price when it was created and the price when it was spent. The total value at the time of spending is then divided by the total value at the time of creation to produce the SOPR value.

Methodology

The core formula is SOPR = Sum(Realized Value) / Sum(Value at Creation). We analyze several variants: raw SOPR, Adjusted SOPR (aSOPR) which ignores outputs with a lifespan of less than 1 hour to reduce noise, and cohort-based SOPR (Short-Term and Long-Term Holder) to differentiate behavior between new and old investors.

Edge & Advantage

This pillar provides a direct, unadulterated view of holder profitability, offering an edge over indicators based solely on price and volume which can be easily manipulated.

Key Indicators

• Adjusted SOPR (aSOPR)

  high

  Filters out short-lived transactions (less than 1 hour) to provide a cleaner signal of market behavior.

• Short-Term Holder SOPR (STH-SOPR)

  high

  Tracks the profitability of coins held for less than 155 days, representing speculative and newer market participants.

• Long-Term Holder SOPR (LTH-SOPR)

  medium

  Measures the profitability of coins held for more than 155 days, reflecting the sentiment of experienced investors.

Data Sources

• Glassnode

  Provides comprehensive on-chain analytics and pre-calculated SOPR metrics.

• CryptoQuant

  Offers real-time on-chain data charts, including various SOPR indicators for major cryptocurrencies.

Example Questions This Pillar Answers

• → Will Bitcoin's Adjusted SOPR (7-day average) fall below 1.0 before the end of the month?
• → Will Short-Term Holder SOPR for Ethereum remain above 1.0 for the next 72 hours?
• → Will a spike in Long-Term Holder SOPR above 2.5 precede a market correction of over 10%?

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