The SOPR ratio, or Spent Output Profit Ratio, is a blockchain metric that assesses the profitability of all spent outputs on a given day, providing insight into whether investors are realizing gains or losses. It is calculated by dividing the realized price of all spent outputs by the realized price of all outputs at the time they were created. A ratio above 1 indicates net profit-taking, while a ratio below 1 suggests net losses.
Context
The SOPR ratio is frequently analyzed by traders and analysts to gauge market sentiment and identify potential trend reversals in cryptocurrency markets. Discussions often revolve around its predictive power for identifying bull and bear market phases, as well as its utility in confirming price action. Current analysis often compares the SOPR ratio’s behavior across different market cycles and its correlation with other on-chain metrics to provide a more comprehensive market outlook.
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