Analyst: Short-Term Holder SOPR Drops Below 1, Average Profits Wiped Out

CryptoQuant analyst Darkfost stated that Bitcoin short-term holders' Spent Output Profit Ratio (SOPR) has fallen to 0.98, remaining in negative territory since October 30, indicating this group is beginning to realize losses when transferring Bitcoin.

This metric measures the profit or loss realized when UTXOs are spent. Each UTXO carries its own cost basis; when Bitcoin is moved, old UTXOs are destroyed and new UTXOs are generated at a new realized price, with SOPR calculating the difference between the two. This round only tracks short-term holders, whose monthly average previously reached 1.013 but has now fallen back to the neutral level of 1, with average profits wiped out.

Darkfost noted that recent data suggests the market is trending toward a capitulation phase. He believes that in a long-term bull market, a negative SOPR often corresponds to buying opportunities, but the monthly average has yet to reflect this, and capitulation may persist for several more days before hitting extremes.