Darkfost: SOPR for Short-Term Holders Falls Below 1, Average Profit Wiped Out

According to a TechFlow report on November 11, CryptoQuant analyst Darkfost said that the Spent Output Profit Ratio (SOPR) for Bitcoin short-term holders (STH) has fallen to 0.98 and has remained in negative territory since October 30, indicating that this group is beginning to realize losses when transferring Bitcoin. The metric measures the profit or loss realized when UTXOs are spent: each UTXO carries its own cost basis; when coins are moved, the old UTXO is destroyed and a new UTXO is created at a new realized price, and SOPR calculates the difference between the two. In this cycle, only short-term holders are included. Their monthly average once reached 1.013, but has now fallen back to the neutral level of 1, erasing the average profit. Darkfost believes that recent data suggests the market is tending toward a capitulation phase. In a long-cycle bull market, a negative SOPR often corresponds to attractive buying opportunities, but the monthly average has not yet reflected this, suggesting that capitulation may continue for several more days before reaching an extreme.

Source: TechFlow