What is SOPR and how does it benefit investors?

When do investors in the market panic? Or act greedy?

On-chain indicators, that is, blockchain data, give us an instant x-ray of the market. Specifically, the short-term and long-term SOPR data shows whether investors are selling at a profit or a loss.

So, what is SOPR?

What is SOPR?

SOPR (Spent Output Profit Ratio) is based on a very simple logic. Let's understand this with a grocer analogy.

Suppose a grocer bought tomatoes for $10 per kilo. If they sell these tomatoes for $12, they make a profit; if they sell for $8, they take a loss; and if they sell for $10, they break even. SOPR tells us exactly the average state of sold bitcoins relative to the price at which they were acquired.

This simple ratio gives us a very powerful signal for understanding investor psychology.

So how should we read this ratio?

How to Interpret SOPR?

All the data relates to the number 1.00.

This level is the cost basis for investors.

• If the SOPR ratio is above 1, it means investors are, on average, selling at a profit. This situation generally indicates optimism and an appetite for profit-taking in the market.

• If the SOPR ratio is below 1, it means investors are, on average, selling at a loss. This signals fear, panic, and a loss of conviction in the market.

• If the SOPR ratio is equal to or very close to 1, the market is somewhat undecided; investors are selling near their cost basis.

The common phrase we hear, "I'll sell and get out when it gets back to my cost," corresponds to a SOPR of 1.00.

So how should this data be interpreted in bull and bear markets?

Different Interpretations of SOPR in Bull and Bear Markets

First, let's look at a bull market.

In bull markets, when prices start to fall, the SOPR value also pulls back towards the 1 level and typically finds support there before turning back up; this is the "buy the dip" behavior.

In bear markets, the opposite happens; when prices rise, the SOPR value gets stuck at the 1 level, which acts as resistance; this is the "break-even" or "exit liquidity" behavior.

In the chart below, we can see how investors reacted during the periods of rise and fall we have experienced since 2020. During dips in bull periods, although the SOPR data may turn negative, the selling at a loss remains at a relatively low level. This shows that belief in the bull trend continues, but short-term holders (STH-SOPR) are making panic sales.

So?

On-chain chart comparing Bitcoin price and SOPR (Spent Output Profit Ratio) data from 2020 to 2025.

The 2024-2025 Bull Run and SOPR

In the current cycle, the SOPR data gives a clear idea about the formation of local tops.

The 7-day EMA data clearly shows how much profit-taking has increased at local tops over the last 2 years. So, what is the difference between short-term (STH, Short-Term Holder) and long-term (LTH, Long-Term Holder) SOPR data?

On-chain analysis chart comparing Bitcoin price and SOPR 7-day EMA data from 2020 to 2025.

What is the Difference Between STH-SOPR and LTH-SOPR?

In on-chain analysis, UTXOs can be divided into many groups according to their age:

• 1-3 months

• 3-6 months

• 6-12 months

• 1-3 years

• 3-5 years

• 5-7 years

• 7-10 years

• 10+ years

Each of these age groups has its own cost basis (Realized Price), PnL Ratio (MVRV), and profit/loss selling ratio (SOPR). To simplify these age bands, 155 days is chosen. The reason for selecting 155 days is that, after statistical research, the probability of a bitcoin investor who has held for 155 days making a panic sale greatly decreases after this point.

Therefore, investors holding for less than 155 days are called Short-Term Holders (STH), and those holding for more than 155 days are called Long-Term Holders (LTH). When we examine the SOPR data in these categories, a very clear picture emerges.

The first graph clearly shows how short-term investors panic sell at a loss during corrections. But what about long-term investors?

On-chain chart comparing Bitcoin price and Short-Term Holder SOPR (STH-SOPR) data from 2020 to 2025.

Long-term investors only panic at the bottom points of bear markets. In other words, the more experienced investor has a stronger hand, but unfortunately, a bear market can make them panic too. We can see the panic sales of this investor group during the FTX crisis in the chart below.

Finally, what is adjusted SOPR?

On-chain chart comparing Bitcoin price and Long-Term Holder SOPR (LTH-SOPR) data from 2020 to 2025.

What is aSOPR (Adjusted SOPR)?

Standard SOPR data can sometimes contain meaningless signals.

This is where Adjusted SOPR (aSOPR) comes into play. aSOPR does not take into account very short-term transfers with a lifespan of less than one hour, as these are often not genuine buy-sell transactions. Thanks to this filtering, the noise created by transfers without economic meaning is cleaned up, and the market's true profit-loss situation is revealed more clearly.

In short, aSOPR gives us a clearer picture by reducing the noise.

This data is generally used for short-term (instantaneous and hourly) risk analysis.

On-chain chart comparing Bitcoin price and Adjusted SOPR (aSOPR) from 2020 to 2025.

Conclusion

In summary:

• MVRV shows us the unrealized profit/loss ratio. In other words, the PnL ratio we see when we look at our wallet.

• SOPR shows the profit/loss ratio that emerges after a sale.

• In bull markets, short-term investors are particularly prone to panic selling (STH-SOPR).

• In bear markets, even long-term investors exit the market at a loss at the very bottoms (LTH-SOPR).

• At local tops in a bull market, both investor groups accelerate their profit-taking.

Thank you for reading.