The Spent Output Profit Ratio (SOPR) is an on-chain indicator that measures the profit or loss realized by investors when coins are moved on-chain. It provides insight into market sentiment, profit-taking behavior, and potential turning points in Bitcoin’s price cycle. SOPR is calculated by comparing the price sold to the price paid for each unit of Bitcoin, offering a real-time view of whether investors are realizing gains or losses.
When SOPR is above 1, it indicates that coins are, on average, being sold at a profit—i.e., the price at the time of sale is higher than the price at which the coins were acquired. Sustained SOPR levels in the 1.05–1.10 range or higher often coincide with profit-taking phases, particularly in overheated markets. These periods may precede local or macro price tops, especially when accompanied by declining momentum or waning demand.
When SOPR falls below 1, it suggests that coins are being sold at a loss, often reflecting capitulation or distressed selling. Prolonged periods of sub-1 SOPR values tend to occur during bear markets, when investor sentiment is pessimistic. These conditions have historically aligned with market bottoms or accumulation zones.
A critical signal occurs during SOPR resets, particularly after extended bear markets. When SOPR returns above 1 after spending a long period below, it often marks the beginning of a new bull cycle. This shift indicates that the market has absorbed most of the losses, and coins are once again being sold at a profit, reflecting renewed optimism and upward momentum.
These resets are most meaningful when accompanied by increasing volume, improving macro trends, or confirmation from other on-chain metrics. They suggest a transition from loss-dominated selling to profit-driven activity, which tends to support a more sustainable price recovery.
The indicator reliability between Bitcoin’s price and the Spent Output Profit Ratio ranges from 0 to 1. Based on regression model tests conducted by the RightPulse Lab, the closer the indicator reliability value is to 1, the more reliable this indicator becomes for decision-making.
