Bitcoin price has now declined to $56k; does that mean a top is in? Or is this just a shakeout? Here’s what the SOPR indicator says about it. The Bitcoin SOPR Indicator The BTC Spent Output Profit Ratio (or SOPR in short) is an on-chain indicator that estimates whether investors are selling at a profit or a loss. When the metric’s value is above one, it means coins that were moved during the period were sold, on an average, at a profit. While SOPR values less than one imply the overall market has been selling at a loss during the particular timescale. If the indicator starts trending up, it could mean holders are now realizing their profits and a correction could soon be coming. On the other hand, a downwards trend implies sellers are moving their coins at a loss, and holders with profitable coins may be sitting on to them in hopes of further price appreciation. Related Reading | Bitcoin MVRV Shows Top Isn’t In Yet, BTC Still Has Room To Grow What Does The Indicator Tell Us About Tops And Shakeouts? An analyst has created a chart in a CryptoQuant post that highlights the trend in the value of the indictor over the past year and a half. The trend of the SOPR during the early 2021 run versus now | Source: CryptoQuant As you can see, above are the graphs for a few different versions of the indicator. The STH SOPR and LTH SOPR metrics show whether short-term and long-term holders, respectively, are taki...
