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.