aSOPR
Adjusted Output Profit Ratio (aSOPR) is a ratio of spent outputs (lived more than an hour) in profit at the time of the window.

Definition

Adjusted Output Profit Ratio (aSOPR) is a ratio of spent outputs (lived more than an hour) in profit at the time of the window.
It is calculated as the USD value of spent outputs at the spent time(realized value) divided by the USD value of spent outputs at the created time(value at creation).

Interpretation

Adjustment was made to SOPR by not accounting for hour less lived coins’ movements. This allows excluding noises that are only hour less lived UTXO which has minor implication compared to long lived UTXOs.
As a result, the spectrum of UTXO coverage is An Hour<UTXOs age.

By Value itself

  • aSOPR value greater than 1 ( aSOPR > 1 )
    It implies that the coins moved in a certain timescale are, on average, selling at a profit.
  • aSOPR value of exactly 1 ( SOPR =1 )
    It implies that the coins moved in a certain timescale are, on average, selling coins at break even.
  • aSOPR value less than 1 ( SOPR < 1)
    It implies that the coins moved in a certain timescale are, on average, selling at a loss.

By examining trend

  • aSOPR trending higher implies profits are being realized with potential for previously illiquid supply being returned to liquid circulation
  • aSOPR trending lower implies losses are being realized and/or profitable coins are not being spent.

Investing Applied Scenario:

  1. 1.
    Historically, in the middle of bull sentiment, the market correction begins right before the bull run begins and making SOPR drop below '1'. This could be the right time to buy before the bull run starts.
  2. 2.
    Historically, in the middle of bear sentiment, the market correction begins right before the bear market starts making SOPR rise above '1'. This could be the right time to sell before the bear market starts
Last modified 1mo ago