SOPR Ratio (LTH-SOPR/STH-SOPR)
SOPR Ratio is calculated as long-term holders' SOPR divided by short-term holders' SOPR.

# Definition

LTH/STH SOPR calculates the ratio between the Long-Term Holder Spent Output Profit Ratio and the Short-Term Holder Spent Output Profit Ratio. A higher value of the ratio means a higher spent profit of LTH over STH, which is usually useful for spotting market tops.
$\text{SOPR Ratio}=\frac{\text{LTH-SOPR}}{\text{STH-SOPR}}$

# Interpretation

During bull markets or periods of rapid price appreciation in Bitcoin’s price, this ratio trends higher, which historically is a good time for market participants to realize a profit. 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). As a result, the spectrum of UTXO coverage is 155 days<UTXOs age.
During bear markets or periods of extended weakness, this ratio trends lower as the amount of profit from LTHs relative to STHs declines. Historically, investors have been rewarded when dollar cost averaging into BTC and holding long term when this ratio has been below 1.0 for extended periods of time during bear markets. Firmly reclaiming 1.0 with follow-through higher has led to strong recoveries, and in some cases the start of a new bull market.

## By Value itself

• SOPR Ratio value greater than 1
It implies that more long-term holders are making profits than short-term holders.
• SOPR Ratio value exactly at 1 ( LTH-SOPR =1 )
It implies that short-term holders and long-term holders are making the same profits.
• SOPR Ratio value less than 1 ( LTH-SOPR < 1)
It implies that more short-term holders are making profits than long-term holders.

## By examining trend

• SOPR Ratio trending higher implies profits are being realized with potential for previously illiquid supply being returned to liquid circulation
• SOPR Ratio trending lower implies losses are being realized and/or profitable coins are not being spent.
This metric has been proposed by Daniel Joe, CQ Verified Author.