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:
- Find out what the Bitcoin was worth when someone bought it.
- Check its value when they sold it.
- 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.
Spotting SOPR Trends
- 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!