aSOPR (Adjusted SOPR)

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

Definition

The adjusted Spent Output Profit Ratio (aSOPR) is a key metric in cryptocurrency analysis that provides insights into whether people are making a profit when they spend their coins. It takes into account factors like aggregate profit and adjusts for spent coins that may not re-enter circulation. By doing so, it offers a clearer understanding of market behavior. It's like a sophisticated tool that helps us see the cryptocurrency market with greater clarity and accuracy.

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.

Adjusted Spent Output Profit Ratio: Investing Applied Scenario

1. Historically, in the middle of bull sentiment, the market correction begins right before the bull run begins and makes aSOPR drop below '1'. This could be the right time to buy before the bull run starts.

2. Previously, in the middle of bear sentiment, the market correction begins right before the bear market starts making aSOPR rise above '1'. This could be the right time to sell before the bear market starts