SOPR
In Simple Terms: SOPR checks every coin moved on-chain and asks: did the seller make money or lose money? If SOPR is above 1, the average seller is cashing out in profit (bullish sentiment, but also distribution). If SOPR is below 1, the average seller is accepting a loss (capitulation). The most important signal: when SOPR drops below 1 and then recovers back above it, that is the "reset" that has marked every major Bitcoin bottom.
SOPR (Spent Output Profit Ratio) is an on-chain metric developed by Renato Shirakashi that measures the ratio between the selling price and the purchase price of Bitcoin UTXOs moved on-chain. For each spent output, it compares the price at which the coin was last moved (its cost basis) to the price at which it is now being moved (its selling price). The aggregate ratio reveals whether coins moving on-chain are, on average, being sold at a profit or loss.
For traders, SOPR provides a higher-resolution view of market sentiment than MVRV because it looks only at coins that are actually being spent (sold, transferred, or used), not at the entire supply. If MVRV tells you "holders are in profit," SOPR tells you "and they are actually cashing out" — the difference between unrealized and realized behavior. SOPR below 1.0 for extended periods signals that even sophisticated holders are capitulating, a condition that historically has preceded major reversals.
How It Works
For each spent transaction output (UTXO), SOPR calculates:
SOPR = Price_Sold / Price_Acquired
- SOPR > 1.0: Coins moving on average at a profit. Normal during uptrends but elevated levels can signal distribution.
- SOPR = 1.0: Coins moving at breakeven.
- SOPR < 1.0: Coins moving at a loss. Signals capitulation — holders are willing to lock in losses.
Key variants:
aSOPR (Adjusted SOPR): Filters out outputs with a lifespan of less than 1 hour, which are typically "relay" transactions (exchange internal transfers, automated wallet behavior) that would distort the signal. aSOPR is the preferred metric for most analysis.
STH-SOPR (Short-Term Holder SOPR): Focuses only on coins that last moved less than 155 days ago — the "hot" supply held by more reactive, shorter-term participants. STH-SOPR is more sensitive to near-term sentiment shifts than aggregate SOPR.
LTH-SOPR (Long-Term Holder SOPR): Focuses on coins held >155 days. LTHs rarely move coins at a loss; when LTH-SOPR drops below 1, it indicates even the strongest hands are capitulating — a rare and powerful bottom signal.
Why It Matters for Traders
SOPR reset signals cycle transitions. The "SOPR reset" — where SOPR drops below 1, finds a bottom, and then reclaims 1.0 from below — has been one of the most reliable on-chain signals for Bitcoin bottoming. The logic: when even the most stubborn holders capitulate (SOPR < 1), the selling pressure from weak hands is exhausted. When SOPR recovers back above 1, it confirms that buyers are absorbing remaining sell pressure and the trend is flipping. These reset events have occurred at every major bear market bottom.
STH-SOPR identifies local tops and bottoms. Short-term holders are reactive — they buy the FOMO and sell the fear. STH-SOPR spikes (short-term holders selling at large profits) often coincide with local tops as momentum chasers cash out. STH-SOPR troughs below 1 (short-term holders panicking) often coincide with local bottoms. For swing traders, STH-SOPR provides a sentiment gauge for shorter timeframes than macro MVRV.
SOPR divergence detects trend exhaustion. When price makes a higher high but SOPR makes a lower high, profit-taking is diminishing despite higher prices — a bearish divergence that suggests the uptrend is running out of conviction. Conversely, when price makes a lower low but SOPR makes a higher low, sellers are exhausting — a bullish divergence.
Common Mistakes
- Treating every SOPR dip below 1 as a buy signal. SOPR can oscillate around 1 repeatedly during sideways markets. The meaningful signal is an extended period below 1 (weeks, not hours) followed by a decisive reclaim, not a brief dip and recovery. Depth and duration matter.
- Ignoring the difference between aSOPR and raw SOPR. Raw SOPR is contaminated by high-frequency relay transactions (exchange internal moves, automated wallet sweeps) that have near-zero holding time. These transactions always have SOPR ≈ 1 (buy and sell at essentially the same price) and dilute the signal. Always use aSOPR for analysis.
- Applying SOPR logic to proof-of-stake chains without adaptation. SOPR was designed for UTXO-based chains (Bitcoin, Litecoin, Bitcoin Cash). Account-based chains like Ethereum require different profit/loss methodologies (using average purchase price per address rather than per UTXO). SOPR is not directly portable; use it for Bitcoin and UTXO chains.
FAQ
Q: What SOPR level signals a cycle top? A: There is no fixed SOPR level that marks tops, but a pattern of sustained elevated SOPR (>1.05-1.10) combined with STH-SOPR spikes and declining momentum is the classic distribution signature. MVRV is better for cycle tops; SOPR is better for identifying the profit-taking behavior that accompanies them.
Q: How do I use SOPR with other on-chain metrics? A: SOPR works well in combination with MVRV (for cycle context), exchange flows (for distribution confirmation), and realized price (for support/resistance levels). When SOPR drops below 1 while price approaches the realized price, and exchange outflows are accelerating, that is a high-conviction accumulation signal.
Q: Does SOPR work for altcoins? A: Limited application. Many altcoins are ERC-20 tokens on Ethereum, which operates on an account model rather than UTXOs. Standard SOPR calculation does not apply. Some analytics platforms provide adapted profit/loss metrics for Ethereum and major tokens, but they use different methodologies. For altcoins, focus on token-specific metrics (TVL, revenue, user growth) rather than trying to force Bitcoin-style on-chain metrics.
Deep Dive
Want to explore further? Check out:
- Understanding Crypto Market Structure: Order Flow, Liquidity and Price Discovery
- Open Interest Explained: What OI Tells You About Crypto Market Trends
- Liquidation Maps: See Where Bitcoin Will Bounce or Break Through
- Leverage Trading Crypto: Complete Guide to Margin Trading 2026