Spent Output Supply Ratio	SOPR

INTERVALS 
Tier 1:  1M, 1W, 3D, 1D	
Tier 2:  1M, 1W, 3D, 1D, 12h, 4h, 2h, 1h, 15m, 10m, 5m, 1m	
Tier 3:  1M, 1W, 3D, 1D, 12h, 4h, 2h, 1h, 15m, 10m, 5m, 1m

Spent Output Profit Ratio (SOPR)

What is SOPR?

SOPR, or Spent Output Profit Ratio, is an indicator used in cryptocurrency market analysis. It shows whether, on average, market participants are selling their cryptocurrencies at a profit or a loss. This is determined using the average purchase price and the average selling price.

How to Interpret SOPR?

Interpretation

SOPR > 1 indicates that investors are typically selling cryptocurrencies at a profit. This is a signal that the market might be in a state of growth.
SOPR < 1 suggests selling at a loss. This could signal a bearish market trend or an opportunity to buy for speculators.
SOPR = 1 indicates a balance between the profits and losses of market participants.


Application in Trading Strategies

With SOPR > 1, investors might consider strategies to secure profits, anticipating potential corrections.
With SOPR < 1, there's an opportunity to buy during falling prices, speculating on an increase in value.
With SOPR close to 1, it suggests market uncertainty, which could be a signal for caution in decision-making.

Delays in on-chain data metrics in exceptional circumstances can reach up to 40 minutes. Due to the structure of the Bitcoin blockchain, delays in these metrics typically range around 20 minutes.

Risks

Overconfidence, remember that SOPR is just one of many indicators. Overinterpreting it can lead to risky decisions.
Market dynamics, the cryptocurrency market is highly volatile and unpredictable. SOPR values can change quickly.

Summary

SOPR is a useful tool for cryptocurrency speculators, enabling a better understanding of the current market sentiment. However, it should be used with caution and in conjunction with other indicators and market analysis methods.

Updated on: 07/03/2024