A key indicator to track on-chain bitcoin spending behavior and current market sentiment is the Spent Output Profit Ratio (SOPR).

The below is from a recent edition of the Deep Dive, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

A key indicator to track on-chain spending behavior and current market sentiment is the Spent Output Profit Ratio (SOPR). SOPR is calculated by dividing the realized value of a spent output (in USD) by the value at creation of the original. Simply put, it’s calculating the price sold over price paid for every UTXO that moves on-chain. The best place to read more on SOPR is here.

SOPR values greater than 1 indicate that on average, more profit is being realized while SOPR values less than 1 indicate that on average, more losses are being realized. At a value of 1, the market is net neutral. We can analyze SOPR behavior at a total market level and across long-term holders (LTHs) and short-term holders (STHs).

What to look for in the SOPR metric is the metric’s reaction around 1. During continued bull-cycle rallies, we consistently see more profit-taking behavior under 5% with these in-between periods when the market is neutral or break-even. You can see when SOPR bounces off of 1 and back to a state of profit taking during bull markets. When it falls below 1 and doesn’t reclaim that level, the market is signaling a bull market reversal forming as investors realize more losses, expecting price to go lower. Here, we use the Adjusted SOPR which ignores all outputs with a lifespan of less than one hour.

Source: Glassnode

As we approach the tops of bull cycles, there are typically sustained, elevated levels of profit taking right before higher peaks. Eventually, the spent supply overwhelms new demand, and therefore a top forms. Currently, we’re seeing increased profit taking but not at the level of a cycle top or peak.

In previous cycles, there’s a rising trend of long-term holders realizing increased profits as price is bid up by new market entrants. Using a 30-day moving average to take a more macro view of the market, we look to have just started this increased trend of LTH profit taking. Profit taking is a healthy sign indicating the second stage of the bull market, distribution over accumulation, is beginning.

Source: Glassnode

For short-term holders, there is a consistent trend of behavior during corrections in bull cycles. As price corrects, weaker hands capitulate and realize losses which puts more sell pressure on the market. We typically see the STH SOPR number reclaim a position back over 1 after this event, as new buyers are shaken out. Not reclaiming 1 would signal that the larger market of short-term holders are not willing to hold coins and rather want to sell them at a loss. For bull market cycles to continue, we’re looking to see the latest STH SOPR reclaim back over 1 when using the 24-hour MA chart. It’s already showing signs of doing so:

Source: Glassnode

By admin

793 thoughts on “What SOPR Can Tell Us About Bitcoin Market Sentiment”
  1. have already been reading ur blog for a couple of days. really enjoy what you posted. btw i will be doing a report about this topic. do you happen to know any great websites or forums that I can find out more? thanks a lot.

  2. Took me time to read all the comments, but I really enjoyed the article. It proved to be Very helpful to me and I am sure to all the commenters here It’s always nice when you can not only be informed, but also entertained I’m sure you had fun writing this article.

  3. Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something. I think that you can do with some pics to drive the message home a bit, but other than that, this is wonderful blog. A great read. I’ll certainly be back.

  4. of course like your web-site however you have to check the spelling on several of your posts. Many of them are rife with spelling problems and I find it very troublesome to tell the reality then again I will surely come back again.

  5. Hey! awesome blog! I happen to be a daily visitor to your site (somewhat more like addict 😛 ) of this website. Just wanted to say I appreciate your blogs and am looking forward for more!

  6. Dignity College of Healthcare online surgical technician training is far superior to other online Surgical Technician programs because it includes the training, exam review and national certification exams. Register with Confidence and attend a nationally accredited, but affordable program. In just 4 months, you can complete the surgical technician program from the comfort of your home without a loan on your neck. Enroll now at https://dignitycollegeofhealthcare.com/surgical-technician

  7. My coder is trying to convince me to move to .net from PHP. I have always disliked the idea because of the expenses. But he’s tryiong none the less. I’ve been using WordPress on numerous websites for about a year and am nervous about switching to another platform. I have heard great things about blogengine.net. Is there a way I can import all my wordpress posts into it? Any help would be really appreciated!

  8. Your thing regarding creating will be practically nothing in short supply of awesome. This informative article is incredibly useful and contains offered myself a better solution to be able to my own issues. Which can be the specific purpose MY PARTNER AND I has been doing a search online. I am advocating this informative article with a good friend. I know they are going to get the write-up since beneficial as i would. Yet again many thanks.

  9. Amazing! Your site has quite a few comment posts. How did you get all of these bloggers to look at your site I’m envious! I’m still studying all about posting articles on the net. I’m going to view pages on your website to get a better understanding how to attract more people. Thank you!

  10. I cannot thank you more than enough for the blogposts on your website. I know you set a lot of time and energy into these and truly hope you know how deeply I appreciate it. I hope I’ll do a similar thing person sooner or later.

  11. I like to spend my free time by scanning various internet resources. Today I came across your website and I found it has some of the most practical and helpful information I’ve seen.

  12. [url=https://finpecia.store/]generic propecia usa[/url] [url=https://toradol.shop/]toradol price[/url] [url=https://buyalbenza.store/]albenza for parasites[/url] [url=https://buyprozac.shop/]fluoxetine 20 mg online[/url] [url=https://vermox365.com/]vermox over the counter[/url]

  13. [url=https://buyacyclovir.monster/]zovirax prescription cream[/url] [url=https://finpecia.cfd/]propecia pills online[/url] [url=https://buyvardenafil.monster/]canadian pharmacy levitra[/url] [url=https://buyampicillin.shop/]brand name ampicillin[/url] [url=https://lopressor.shop/]lopressor tablets[/url]

  14. [url=http://cafergot.shop/]cafergot 100mg[/url] [url=http://hydroxychloroquine.agency/]plaquenil 100[/url] [url=http://valtrex.cfd/]over the counter valtrex cream[/url] [url=http://buytadacip.shop/]tadacip online[/url] [url=http://mebendazole.store/]vermox 500mg price[/url] [url=http://buybudesonide.shop/]budesonide 3 mg price india[/url] [url=http://vardenafil365.com/]where can i buy levitra in canada[/url]

  15. [url=http://hydroxychloroquine.agency/]where to buy plaquenil[/url] [url=http://diclofenac.shop/]diclofenac 1 topical gel[/url] [url=http://dutasteride.store/]buy avodart online no rx[/url] [url=http://tetracycline.cfd/]where to buy terramycin ophthalmic ointment[/url]

  16. [url=https://buylexapro.shop/]lexapro medication[/url] [url=https://vardenafil.agency/]levitra prices australia[/url] [url=https://cipro.golf/]cipro discount coupon[/url] [url=https://strattera.cfd/]strattera nz[/url] [url=https://buyalbenza.store/]albendazole tablets australia[/url]

  17. [url=https://buyacyclovir.monster/]acyclovir cream price canada[/url] [url=https://diclofenac.shop/]diclofenac prescription cost[/url] [url=https://buyxenical.shop/]xenical nz buy online[/url] [url=https://buyfluconazole.shop/]diflucan 150 mg cost[/url] [url=https://buytadacip.shop/]tadacip from india[/url] [url=https://allopurinol.email/]allopurinol medicine[/url]

  18. Greetings! This is my first visit to your blog! We are a collection of volunteers and starting a new initiative in a community in the same niche. Your blog provided us beneficial information. You have done a wonderful job!

  19. I thought it was going to be some boring old post, but I’m glad I visited. I will post a link to this site on my blog. I am sure my visitors will find that very useful.

  20. I just couldn’t leave your web site prior to suggesting that I really enjoyed the standard info an individual supply to your guests? Is going to be again continuously in order to inspect new posts

  21. Hello there, just became aware of your blog through Google, and found that it is truly informative. I am going to watch out for brussels. I will appreciate if you continue this in future. Lots of people will be benefited from your writing. Cheers!

  22. Just want to say what a great blog you got here!I’ve been around for quite a lot of time, but finally decided to show my appreciation of your work!

  23. Hiya, I am really glad I have found this information. Nowadays bloggers publish only about gossip and net stuff and this is actually frustrating.

  24. I favored your idea there, I tell you blogs are so helpful sometimes like looking into people’s private life’s and work.At times this world has too much information to grasp. Every new comment wonderful in its own right.

  25. Your thing regarding creating will be practically nothing in short supply of awesome. This informative article is incredibly useful and contains offered myself a better solution to be able to my own issues. Which can be the specific purpose MY PARTNER AND I has been doing a search online. I am advocating this informative article with a good friend. I know they are going to get the write-up since beneficial as i would. Yet again many thanks.

  26. I like to spend my free time by scanning various internet resources. Today I came across your website and I found it has some of the most practical and helpful information I’ve seen.

  27. Your thing regarding creating will be practically nothing in short supply of awesome. This informative article is incredibly useful and contains offered myself a better solution to be able to my own issues. Which can be the specific purpose MY PARTNER AND I has been doing a search online. I am advocating this informative article with a good friend. I know they are going to get the write-up since beneficial as i would. Yet again many thanks.

  28. This is an awesome entry. Thank you very much for the supreme post provided! I was looking for this entry for a long time, but I wasn’t able to find a honest source.

  29. Woah this is just an insane amount of information, must of taken ages to compile so thanx so much for just sharing it with all of us. If your ever in any need of related information, just check out my own site!

  30. We absolutely love your blog and find the majority of your post’s to be exactly what I’m looking for. Do you offer guest writers to write content to suit your needs? I wouldn’t mind composing a post or elaborating on a number of the subjects you write about here. Again, awesome weblog!

  31. Hi, possibly i’m being a little off topic here, but I was browsing your site and it looks stimulating. I’m writing a blog and trying to make it look neat, but everytime I touch it I mess something up. Did you design the blog yourself?

  32. I would really like to appreciate the endeavors you cash in on written this article. I’m going for the similar best product from you finding out in the foreseeable future as well. Actually your creative writing abilities has urged me to begin my very own blog now. Genuinely the blogging is distributing its wings rapidly. Your write down is often a fine illustration showing it.

  33. Thanks a bunch for sharing this with all people you really recognize what you are talking about! Bookmarked. Kindly also seek advice from my web site =). We can have a link alternate contract between us!

  34. Unquestionably believe that which you said. Your favorite reason seemed to be on the net the easiest thing to be aware of. I say to you, I certainly get annoyed while people consider worries that they plainly don’t know about. You managed to hit the nail on the head. Will probably be back to get more. Thanks

  35. Hey, I simply hopped over to your website by way of StumbleUpon. No longer one thing I’d normally learn, but I preferred your thoughts none the less. Thanks for making one thing worth reading.

  36. Thanks pertaining to discussing the following superb written content on your site. I ran into it on the search engines. I will check back again if you publish extra aricles.

  37. Good post. I study something more difficult on different blogs everyday. It’s going to always be stimulating to learn content material from other writers and observe a little bit one thing from their store. I’d prefer to use some with the content material on my blog whether you don’t mind. Natually I’ll give you a link in your web blog. Thanks for sharing.

  38. Hello there, just became aware of your blog through Google, and found that it is truly informative. I am going to watch out for brussels. I will appreciate if you continue this in future. Lots of people will be benefited from your writing. Cheers!

Leave a Reply

Your email address will not be published.