Spent Output Profit Ratio (SOPR) measures the ratio of the realized value of spent outputs to their value at the time they were created, indicating whether BTC being moved on-chain is, in aggregate, being sold at a profit or a loss. A value above 1 means coins are being spent at a price higher than when they were last moved; a value below 1 means they are being spent at a loss.
When SOPR is consistently above 1, the market is in a regime where the average participant is realizing profits - often associated with bull market conditions, though sustained high readings can also signal distribution as holders take advantage of elevated prices. When SOPR drops below 1, participants are moving coins at a loss, which in prolonged downtrends can indicate capitulation. A reset of SOPR back to 1 from above often acts as a support level in bull markets, as holders are reluctant to sell at break-even.
SOPR is most powerful when analyzed in the context of market cycle positioning - whether a cross above or below 1 represents a regime shift depends heavily on the broader trend and which holder cohort is driving the spent output activity.
