What is SOPR?

What’s SOPR?

SOPR, or Spent Output Profit Ratio, is like a mood ring for the Bitcoin market.

It tells us whether people are selling their Bitcoin with grins (profit) or grimaces (loss).

Here’s the simple math:

SOPR = Bitcoin value when spent ÷ Bitcoin value when bought

Why should you care?

It’s like having a secret window into other investors’ thoughts. Pretty cool, right?

Crunching the SOPR Numbers

Calculating SOPR isn’t as tricky as solving a Rubik’s cube. Here’s how it goes:

  1. Find out what the Bitcoin was worth when someone bought it.
  2. Check its value when they sold it.
  3. Divide the selling price by the buying price.

Let’s say you bought 1 BTC for $30,000 and sold it for $40,000. Your SOPR would be 1.33 (40,000 ÷ 30,000).

Cha-ching!

You’re in profit territory.

SOPR in Action

What Do Those Numbers Mean?

  • SOPR > 1: Sellers are doing their happy dance. They’re making money!
  • SOPR = 1: It’s a tie. Nobody’s winning or losing.
  • SOPR < 1: Ouch! Sellers are taking a hit.
  • SOPR on the rise: The market’s getting hot! More folks are selling at a profit.
  • SOPR taking a dive: Brace yourself. Things might be cooling down as losses pile up.

SOPR: The Advanced Course

SOPR with a Twist

  • Adjusted SOPR (aSOPR): This one ignores super-quick transactions to cut out the noise.
  • LTH-SOPR & STH-SOPR: These separate the long-term hodlers from the short-term traders.

These tweaked versions give us a clearer picture of what’s really going on. It’s like upgrading from binoculars to a telescope!