What is SOPR (Spent Output Profit Ratio)?
SOPR is an indicator in Cryptocurrencies that reflects the degree of realised profit and loss for all coins moved on the Blockchain
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SOPR is calculated simply as (Price sold / Price bought)
There are three possible values of SOPR.
SOPR > 1
- The coin holder made a profit.
- The selling price is higher than the buying price
SOPR < 1
- The coin holder made a loss.
- Based on the formula above the selling price is lower than the buying price
SOPR = 1
- The coin holder made no profit or loss.
Here is an example of ETH SOPR:
Indication by SOPR
What does this SOPR indicate?
- In general, higher SOPR values indicate that more profit was realised that day. Successive peaks of high SOPR (creating an indicator uptrend) suggest continual distribution, usually during bullish price rallies.
- A lower SOPR indicates fear and panic selling in the market.