Understanding SOPR: Your Guide to Spotting On-Chain Profit and Loss Signals

What Does SOPR Actually Measure?

SOPR stands for Spent Output Profit Ratio, and it’s one of the most straightforward chain metrics you can use to gauge market sentiment. At its core, SOPR measures whether coins being moved on-chain are generally being sold at a profit, loss, or break-even point. Think of it as a snapshot of aggregate investor behavior at any given moment.

How SOPR Is Calculated

The calculation is elegantly simple: take the realized value (in USD) of coins when they’re spent on-chain, then divide it by the value (in USD) at the time those coins were originally created or last moved. In other words: selling price ÷ purchasing price.

Interpreting SOPR Values

The numbers tell you a clear story:

• SOPR > 1: Coins being moved that day are trading at an average profit. Sellers are winning, having bought lower than their current selling price.
• SOPR < 1: Coins being moved are trading at an average loss. Holders are liquidating underwater positions.
• SOPR = 1: Perfect equilibrium. Coins are exiting wallets at exactly their entry price.

SOPR and Market Cycles

Where it gets interesting is watching SOPR trends over time. When you see repeated peaks of elevated SOPR readings forming an uptrend, it signals continuous distribution—particularly during bullish market rallies. This is the red flag moment: as profitable coins flood back into circulation, the risk of a local or broader market top increases significantly. Smart investors watch for these SOPR peaks as potential exit signals.