A Bitcoin on-chain indicator that analyzes Spent Output Profit Ratio (SOPR) to provide insights into market sentiment by comparing short-term and long-term trends.
Explore complementary indicator rolesHow it works
The SOPR Indicator calculates the profit or loss of spent Bitcoin outputs by tracking the price at which coins were last moved. It uses two primary moving averages: a short-term Double Exponential Moving Average (DEMA) over 150 days and a long-term Weighted Moving Average (WMA) over 365 days.
By comparing these two moving averages, the indicator generates market sentiment signals. When the short-term SOPR exceeds the long-term SOPR, the market is considered bullish, and when it falls below, the market is deemed bearish. The indicator uses color-coded bars to visually represent these market conditions, making trend identification intuitive for traders.
Why it may be useful
The SOPR Indicator provides unique insights into Bitcoin market dynamics by leveraging on-chain data, which traditional price-based indicators cannot capture. It offers traders a deeper understanding of market participant behavior by revealing whether coins are being spent at a profit or loss, helping to anticipate potential trend reversals and market sentiment shifts.
By integrating short-term and long-term trends, the indicator offers a more comprehensive view of market conditions. This approach allows traders to make more informed decisions by understanding not just current price movements, but the underlying economic behavior of Bitcoin holders.
When to explore it
The SOPR Indicator is most effective for swing traders and long-term investors looking to understand broader market trends in the Bitcoin ecosystem. It works best during periods of significant market transitions, helping traders identify potential trend changes by analyzing the profit or loss behavior of Bitcoin holders.
Traders should use this indicator in conjunction with other technical and fundamental analysis tools, as it provides a unique perspective on market sentiment. It is particularly useful for assessing longer-term market cycles and understanding the psychological dynamics of Bitcoin investors.
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What we’ve verified
Access, alerts and repainting behaviour have not been independently verified for this indicator. Check the creator’s current publication and settings.
General descriptions and classifications are recovered research. Verified details above identify the specific checks we have completed. Check the creator’s current publication for later changes.
