SOPR, or Spent Output Profit Ratio, is an indicator that reflects the degree of asset profit/loss. It can be used to determine whether the selling price of an asset is higher than the buying price. If the selling price of an asset is higher than the buying price, it means that the asset was sold at a profit; otherwise, it means that the asset was sold at a loss. SOPR is usually measured in days and is used to evaluate the profit and loss of an asset within that day.

Formula specific factors:

SOPR is calculated as the asset's sold value (in U.S. dollars) divided by the asset's bought value (in U.S. dollars) in U.S. dollars).

• Value = The circulating supply of the asset within a specific period of time (usually in units of 1 day)
• Price (spent) = Asset sales Bid price
• Price (created) = asset buying price

Specific analysis purpose:

SOPR converts bits By comparing the selling value of the coin with the buying value on that day, the profit or loss ratio can be calculated. It captures market profits and losses over a specific period of time and reflects macro market sentiment. It can also provide buy/sell signals to investors.

• SOPR value greater than 1: Assets were sold at a profit on average that day (i.e. the selling price was greater than the buying price).
• SOPR value less than 1: Assets were sold at a loss on average that day (sold at a discount to the buying price).
• SOPR value is greater than 1 and continues to rise: Asset prices continue to rise and the market continues to make profits. The market is about to reach a top and then starts to fall, which is a sell signal.
• SOPR less than 1 and declining: Asset prices continue to fall and the market continues to lose money. The market is about to enter a bottom and then start to rise, which is a buy signal.

In actual analysis, people usually use a variant indicator of SOPR: aSOPR to improve the accuracy of SOPR. aSOPR eliminates Bitcoinswith transaction times less than 1h. This makes its reflection amplitude more pronouncedthan SOPR. It can better display the profit and loss of assets and market trends, while providing clearer buy/sell signals.

Historically, SOPRs between 1.04 and 1.07 represent market tops; SOPRs between 0.88 and 0.96 represent market bottoms. For example, on November 10, 2022, affected by the FTX bankruptcy, the price of Bitcoin dropped to $16,000. SOPR dropped rapidly from 0.99, bottoming out as low as 0.87. After bottoming out at SOPR, Bitcoin price gradually climbed back above $20,000.