Spent Output Profit Ratio (SOPR) is an on-chain metric that measures the ratio of the realized value to the acquisition value of all spent transaction outputs. This ratio indicates whether market participants are, on average, selling their digital assets at a profit or a loss. A SOPR value greater than one suggests that the average coin spent is realizing a profit, while a value less than one indicates an average loss. It serves as a valuable indicator of overall market sentiment and profitability.
Context
The Spent Output Profit Ratio is a widely utilized metric in crypto market analysis, providing insights into the psychological state of investors. News reports often reference SOPR to explain market trends, particularly during periods of price volatility. A key discussion point involves using SOPR to identify potential market bottoms or tops, as extreme values often precede significant price reversals. Understanding SOPR helps contextualize whether current selling pressure is driven by profit-taking or fear-induced losses.
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