What Is SOPR?
SOPR (Spent Output Profit Ratio) measures whether coins being spent (moved/sold) are in profit or loss. It's calculated by dividing the realized value (price at time of spending) by the value at creation (price at time of acquisition) for all spent outputs in a given period.
How SOPR Works
- SOPR > 1 — Coins are being spent at a profit (holders selling above their cost basis)
- SOPR = 1 — Coins are being spent at break-even
- SOPR < 1 — Coins are being spent at a loss (capitulation)
In bull markets, SOPR tends to stay above 1 and bounces off the 1 level (holders refuse to sell at a loss). In bear markets, SOPR stays below 1 and gets rejected at the 1 level (holders sell any recovery at break-even).
Why It Matters for Traders
SOPR is a real-time gauge of holder behavior. When SOPR drops below 1 and stays there, it signals capitulation — long-term holders are selling at a loss, historically marking cycle bottoms. The SOPR reset (bouncing off 1 in an uptrend) provides confirmation of bull market continuation.
How Perps Traders Use This
For CEX perpetual futures, treat sopr (spent output profit ratio) as context around entries, exits, and risk, not as a standalone signal. Pair it with funding, open interest, and liquidation heat so one indicator does not drive the whole book.
Formula and Worked Example
Example numbers only (not a live quote).
If your account equity is $10,000 and you risk 0.5% per idea, the cash risk budget is $50. With a stop 1% away from entry on a linear USDT-margined perp, notional size is about $5,000 before leverage optics. Size from stop distance first, then pick leverage that fits the margin mode.
Common Mistakes
- Treating a single print of sopr (spent output profit ratio) as a trade signal without checking funding, open interest, and your liquidation price.
- Mixing venue conventions (coin-margined vs USDT-margined, cross vs isolated) and reading the wrong mark.
- Copying example numbers from a glossary into live size without checking the current book depth and fee schedule.
- Ignoring related terms that change the meaning of the print on a given day.
