Bitcoin SOPR Breakout Signals Potential Cycle Reversal

CryptoQuant's SOPR indicator has broken an 11-month suppression, signaling a potential cycle reversal in the Bitcoin market.

The Spent Output Profit Ratio (SOPR) measures whether Bitcoin holders are selling their coins at a profit or a loss. When it sits above 1.0, sellers are getting more than they paid for; below 1.0, they're realizing losses.

CryptoQuant's analysis points to a pattern seen in early 2023, when similar SOPR behavior preceded a historic Bitcoin rally. The firm observed multiple instances of the short-term holder version (STH-SOPR) dipping below 0.95 before bouncing back above 1.0, consistently aligning with recovery phases in Bitcoin's price.

The long-term holder version (LTH-SOPR) has been drifting toward neutral territory, suggesting long-term holders are neither panic-selling nor aggressively taking profits.