SOPR
Web3 / technical analysis
The Spent Output Profit Ratio, an on-chain Bitcoin analytics metric developed by Renato Shirakashi in 2019 that measures whether the Bitcoin being spent in on-chain transactions is moving at a profit or a loss relative to when it was last acquired. SOPR is calculated by dividing the realized value (price at which coins are being spent today) by the value when those coins were last moved (their cost basis). A SOPR above 1 means coins are being spent at a profit on average, indicating that sellers are in profit and may continue selling. A SOPR below 1 means coins are being spent at a loss, indicating capitulation where holders are selling at a loss, which historically has marked market bottoms. The adjusted SOPR (aSOPR) filters out short-term transactions to focus on meaningful economic movements rather than technical network activity. Example: During Bitcoin's capitulation phases in June 2022 and November 2022 following the Terra collapse and FTX bankruptcy respectively, SOPR dropped significantly below 1, indicating widespread selling at a loss. Glassnode's tracking of these SOPR readings below 1, combined with historically low realized price levels, provided on-chain evidence that long-term holders were capitulating at levels historically consistent with market bottoms, a signal that proved accurate as Bitcoin subsequently recovered from both events. Why it matters for Web3: SOPR is one of the most widely followed on-chain Bitcoin indicators because it directly measures market participant behavior, profit and loss, rather than deriving signals from price patterns alone. Its signal value comes from the behavioral finance insight that investors who are in profit have optionality to sell while those at a loss tend to hold until breakeven, making aggregate SOPR readings a useful sentiment and positioning indicator. Platforms like Glassnode have built entire analytics suites around SOPR variations for different holder cohorts.
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