Spent Output Profit Ratio (SOPR) evaluates the profit ratio of the whole market participants by comparing the value of outputs at the spent time to created time. In a simple way, you can estimate the distribution of spent transaction output is in profit or not. SOPR 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).

$SOPR=\frac{\sum_{o \in \text{spent outputs}} \text{value}_o*\text{price}_{spent, o}}{\sum_{o \in \text{spent outputs}} \text{value}_o*\text{price}_{created, o}}$

SOPR can be measured by different timescale(day, hour, and minute), by taking the ratio between the USD value at creation, and the realized value of UTXO.

The SOPR indicator can be considered within the following framework:

**SOPR value greater than 1**implies that the coins moved in a certain timescale are, on average, selling at a profit.**SOPR value less than 1**implies that the coins moved in a certain timescale are, on average, selling at a loss.**SOPR value of exactly 1**implies that the coins moved in a certain timescale are, on average, selling coins at break even.**SOPR trending higher**implies profits are being realized with potential for previously illiquid supply being returned to liquid circulation**SOPR trending lower**implies losses are being realized and/or profitable coins are not being spent.

Through SOPR, you can evaluate whether investors generated profit from selling or not over a particular time frame as below.

**Scenario 1. Bullish Sentiment**Prior to the bullish market, there's usually a market correction happening. SOPR goes below 1, and it would be good timing to purchase undervalued assets.

**Scenario 2. Bearish Sentiment**Prior to the bearish market, there's usually a market correction happening. SOPR goes above 1, and it would be good timing to sell overvalued assets.