Most traders read price to gauge cycle position. But price is just the output. SOPR — Spent Output Profit Ratio — reads the inputs: are the coins being sold today moving at a profit or a loss?
When SOPR is above 1.0, sellers are in profit. When it drops below 1.0, sellers are accepting losses. That’s where the texture gets interesting.
In bull markets, dips that bring SOPR back to 1.0 and bounce are healthy — profit-takers step back, weak hands wash out, and the cost basis resets. It’s essentially the market digesting its own gains.
In bear markets, the opposite is true. SOPR staying below 1.0 for extended periods means holders are capitulating at losses. The eventual refusal to sell below cost basis — when SOPR stops falling even as price does — is often the structural signal before recovery. The market stops agreeing to absorb more pain.
The nuance most miss: SOPR tells you about seller behavior, not buyer conviction. A rising SOPR with rising price is normal expansion. A rising SOPR with flat or falling price means distribution — profit-taking without new buyers absorbing it. That divergence is worth watching.
Price tells you what happened. SOPR tells you what it cost the people who made it happen.
$BTC $ETH $SOL
#OnChainAnalysis #CryptoInsights #Bitcoin #CycleAnalysis #BinanceSquare
When SOPR is above 1.0, sellers are in profit. When it drops below 1.0, sellers are accepting losses. That’s where the texture gets interesting.
In bull markets, dips that bring SOPR back to 1.0 and bounce are healthy — profit-takers step back, weak hands wash out, and the cost basis resets. It’s essentially the market digesting its own gains.
In bear markets, the opposite is true. SOPR staying below 1.0 for extended periods means holders are capitulating at losses. The eventual refusal to sell below cost basis — when SOPR stops falling even as price does — is often the structural signal before recovery. The market stops agreeing to absorb more pain.
The nuance most miss: SOPR tells you about seller behavior, not buyer conviction. A rising SOPR with rising price is normal expansion. A rising SOPR with flat or falling price means distribution — profit-taking without new buyers absorbing it. That divergence is worth watching.
Price tells you what happened. SOPR tells you what it cost the people who made it happen.
$BTC $ETH $SOL
#OnChainAnalysis #CryptoInsights #Bitcoin #CycleAnalysis #BinanceSquare