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Sopr

$BTCUSD SOPR, BFX Longs and Shorts, Greed, Liquidations. This is one of the multi-chart evolving dashboards I use daily for crypto trading. This dashboard attempts to distill a broad scope of data and sentiment into glance value charts. The goal with such dashboards is to seek to stack probabilities to be on the right side of the percentages in every trade. -- The top panel chart shows the SOPR (Spent Output Profit Ratio, (grey line, using the symbol $BTC_SOPR) overlay vs $BTCUSDT (Binance, in blue). The SOPR is a very simple indicator. It is the spent outputs expressed as a ratio and shown as an oscillator on the chart. The Bitcoin SOPR is the realised dollar value divided by the dollar value at creation of the output. Or simply: price sold divided by price paid. SOPR showing under value 1 means that the on chain data has recorded a net realised loss for "spent" Bitcoin. SOPR showing over value 1 means net profit. Renato Shirakashi appears to be the inventor of SOPR for BTC, and he writes about SOPR: "In this analysis two important psychological turning points that significantly change the supply of bitcoin are going to be described by introducing a new oscillating indicator that signals when these major supply changes occur, using blockchain data." I interpret this reference to the psychology of "weak hands" getting flushed out of the market by selling at a loss as shown when SOPR sits below 1 for extended periods of time (bear), and when all the weak hands have left the market, we find a bottom. Because I am an impatient learner, I needed further examples to understand fully. If someone sells you 1 Bitcoin at $50,000USD, that transaction is recorded on the blockchain. If you then sell it for $25,000USD, that is now a spent output which is obviously a negative 0.5 ratio, and would contribute to a SOPR lower than the value 1. Interestingly the SOPR tends to be very close to the value 1 nearly always. Which means that the aggregated data of all spent outputs is nowhere near as extreme as the example I gave (although I'm sure there are plenty of retail traders who bought the high and sold the bottom at a 50% loss). If we rewind to extended periods of low points in the SOPR ratio, extended negative ratio periods coincide with low points. In the past 5 years the lowest ratio was around 0.88, which was December 2018, when the price of Bitcoin was heading lower than $4k USD. That particularly brutal bear market lasted 18 months and you can see that the SOPR was below value 1 for nearly the entire time, indicating that there was a long tail of weak hands realising losses the entire time. --- Also present on the top chart is a brilliant little free indicator called Liq.Levels , wtf is all I can say, this a masterpiece of long/short liquidation data based on market maker behaviour in this case Binance's perpetual BTC/USDT leveraged futures (one of the most active retail leverage platforms). On this layout I have hidden all but the 25x liquidation points both short and long as it captures the widest spread and for the simplest visual as this is a glance-dashboard, on a single panel layout you can view the 50x and 100x which are tighter spreads. Liq.Levels also filters for a minimum of one million USD, so this is real value the market makers are getting out of bed for, essentially these levels are where the market maker really wants to push the price to. If you're new to leverage (don't do it! just buy at spot!), the reason they do this is to hunt the longs and the shorts and cause maximum liquidations (are you still trading with leverage?!). --- The second panel is the famous Bitfinex Longs (green) and Shorts (red) . You can see currently the longs, since around the $39000 level went parabolic. The shorts are just tiny in comparison. The data from Bitfinex seems less erratic than those from other exchanges, so if you find looking at longs and shorts ratios useful, I'd suggest also looking at other websites to see the other major exchange long and short activity, liquidations, and ratios. This info is used to monitor large moves by leveraged traders. While Bitfinex is not the best measure here (ideally you would want all major exchanges aggregated longs vs shorts, but I have not found such indicators on TV, only Bitfinex), you can check the data by comparing it to another exchange, for example Binance you can see that parabolic move the Longs made from the 11th of July to around the 14th of July (while the BTC price fell off a cliff from $30k to $20k), where the ratio of Longs vs Shorts on Binance also skewed heavily to the Long side. This is another way to stack a probability. As the Longs level off and get flushed out (usually by mass liquidation!), this is another variable to find support or resistance. For example you can see the levelling off around 12 May 2022, Bitcoin's price found a short term bottom at $29k. Similarly and most recently you can see as the Longs levelled off from a hectic run up in the mid June 2022 selloff, the price found a short term bottom around $20k. You could say that recently or commonly this is a contrarian indicator, assuming that smart money is seeking to liquidate the maximum possible leveraged positions, so we can assume that generally these leveraged retail traders will largely make incorrect bets most of the time, hence historically as soon as Shorts leave the market, the price spikes up, and vice versa. So, another thing to watch. --- Next we have a Crypto Fear & Greed Index , which as you can see nearly always oscillates in a tight rhythm with Bitcoin's price action. Above 75 (green dotted line) is extreme greed, below 25 (red dotted line) extreme fear. There are quite a few websites that attempt to measure crypto Fear & Greed, and even a variety of different indicators on TradingView, but this was the clearest visually I could find here. The inputs on this version according to the coder are stable coin flows (flight to safety), coin momentum (top 18 coin price relative to 30 day averages), and top 18 coin price high over the previous 90 days. So, it's interesting that despite this being at face value a rather complicated set of data with many inputs, that it just looks like a carbon copy of the Bitcoin chart. Bitcoin has a gravity that is inescapable for all things crypto right now. The difference between looking at this indicator and simply looking at Bitcoin's chart is that it flattens out the action and has a set floor and a ceiling. You can see historically that the best buy times were when fear was at its "height" (where the yellow line is at its lowest). Another way to stack probabilities. At time of writing, is this a great time to buy? Fear appears to be leaving the market, we haven't had a commensurate price move up, so I'd be cautious. Like all these indicators, you can just overlay Bitcoin's price line and backtest the correlation in a few seconds. Buying when fear is at a maximum is usually easier said than done, though! --- Lastly we have Liquidations by Volume , as per the coder this "shows actual liquidations on a per-candle basis by using the difference in volume between spot and futures markets." Blue line is futures volumes, yellow are spot volumes. The code for this indicator shows that it is the same BTCUSDT Perpetual Future's contract from Binance that we have in the Liq.Levels indicator, perfect. Worth noting is that the community of coders at TradingView is a trader's dream. These sorts of customisable dashboards you can build are high value. Having worked for the largest international institutions I find many of these indicators are institutional grade and they have just a few hundred users sometimes, pretty crazy how early in the adoption curve we are with this. If you haven't experienced the "other side" of trading, compared to regular equities forex futures etc the TradingView tools and the crypto data and exchanges are just lightyears ahead. Back to why look at liquidations? As institutions come into the market, and retail wallets on exchanges like Binance and many others continue to use leverage, the action in the derivative (in this case $BTCUSDTPERP) can and often does drive the price of the underlying. Market makers hunt the maximum liquidations, always. The market context is highly relevant here. During volatile periods it is a swinging contrarian indicator. If there has been massive green bars showing short liquidations pushing the price up, then we could be forming/hitting resistance levels and can see reversal/selloffs, and vice versa if there are massive red bars showing long liquidations pushing the price down, this can be hammering out support levels and we look to bounce. The longs and the shorts really do seem to be taking turns getting liquidated right now. Also of relevance is the price action relative to the liquidations. Obviously if an institutional candle pushes the price up or down, there will be mass liquidations. But another scenario that occurs is when are light volumes on the derivatives such as $BTCUSDTPERP we have under the microscope here, but we have large Bitcoin price movements, then the reasons for the move can be understood differently, and we can use this and other contexts to draw conclusions such as for example a scenario where price goes up with light liquidations and derivative action, which could be interpreted as much stronger hands holding coins rather than simply margin calls. --- Good luck!
BEducation
by dreamalittle
10
Humans are not perfect- Very Basically SOPR (Spent Output Profit Ratio) measures the price bought versus price sold. ( but it's more complex than that ) - Negative SOPR typically means people are selling for a loss. ( red dotted Lines columns ) - Positive SOPR typically means people are selling for a win. ( Blue dotted Lines colums ) - So what we can notice and deduct from this graph ? - Simply that we are not perfect. - The Fear and The Greed. - We scare when the price goes up too much. - We fear when the price goes down too much. - Most of the time we sell to early. - Most of the time we sell when it's time to buy. "Human being is the fact to be imperfect anyway" Happy Tr4Ding !
COINBASE:BTCUSD
by thecryer
16
BTC SOPR is converging, signaling breakoutBTC SOPR indicator, useful for long-term investors, typically signals a breakout -- people are not taking profits or losses. Diamond-hands are accumulating. "Definition. 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." No financial advice. dataguide.cryptoquant.com
COINBASE:BTCUSDLong
by hhhhhhhhh9
3
BTC expected to be traded at a discount this weekend. BTC looks to be on sale in the coming days. Approach this weekend with caution if you’re re trading short term action. I would personally sit this weekend out all together. This comes from a combination of positive funding rates on-chain and a slow bleed over the past 24 hours leading into the weekend that has traditionally been red. This price action indicates that we may see a test to the bottom of the bollinger bands which brings us to a sub 60k level. This price action is generally brought on by large holders attempting to grab larger amounts at a discounted rate(as quickly as possible) Liquidation levels are high at the 58k-59k level which could cause a cascading effect of lower trading leading into next week. Approach this weekend with caution if you are placing new longs. I wouldnt lose too much sleep if we see a larger than normal big move down as it should be temporary. If you are utilizing leveraged longs heading into the weekend….May god have mercy on your soul. On a macro scale, I still remain extremely bullish on BTC and see it closing out the month at yet another record close.
COINBASE:BTCUSDShort
by ChimeraHoldings
BTC Explanation and Discussion.Let's review BTC after all the hype of the current pullback. Discussion It's been amusing reading analysis from so-called experts on Reuters and Yahoo finance. The Youtube videos by 'gurus' are not funny, they are just plain sad! So let's look at some of the arguments from the VSPs (very serious people): 1) the so-called 'crash' was caused by Hash Rate failure. REALITY: Hash Rate as indicated (refer chart) has not materially declined - unless the data is wrong - there is no sign that this explanation is correct. 2) Fiat Currency is destroying BTC in order to teach El Salvador a lesson. REALITY: What evidence is there that the price move is materially different than what has already been experienced in the recent past? Do these VSPs check-out a daily price chart? (refer yellow box indicates a larger move) 3) It's a sad day when the Youtube gurus trade the past, and do it sooo badly they even confuse the dates. One minute they are in the future using past information, the next minute they seem to mix the dates of volume vs price as if one leads the other, but they are actually pointing to the sell off bar its - it's like the worse of the worse. REALITY: Time travel is not yet possible. 4) Panic to regulation and taxation. REAILTY: Actually most countries have property ownership laws and taxation on gains . Property laws protect consumers, and taxation normally affects only the HNW investors, who usually manage their affairs to avoid tax. 5) China has banned cryptos . REALITY: China has banned margin FX for years and yet the industry still exists. Chinese regulation waxes and wanes - do you see anyone in China handing over their wallets to the Chinese authorities? 6) Lack of Chinese mining creates downward pressure on price. REAILITY: New entrants enter the market like New Zealand with excess hydro power. So this is not an issue. Current State: 1) SOPR is currently greater than 1. Spent Output Ratio hasn't peaked and its not negative. 2) HODLíng is evidenced by the fact that the Percentage of Coins in Circulation that have NOT Transacted for more than 1 Year has actually increased from recent lows, although obviously there have been sells in the prior rallies and price tops. Recently that percentage has steadied and turned up! It's certainly not at a historic low point to mention it as a catalyst. 3) Breakeven trading on Price rally has slightly occurred, but that was at the top of the range - not a 'sell at market' - > panic. Why Volatility? 1) Firstly, is this a flash crash? Well, what is the definition of a crash? Certainly one day price moves have been larger, so in that context - it's not a crash! 2) Selling at market drives price down - that is, 'hitting the bid'. Long traders exiting underlying positions absorb supply - they don't add to it! 3) Leveraged longs selling at market, automated stop losses from future programmes, no circuit breakers, no Order Book regulation, lack of Central Order Book, lack of spoofing controls using APIs etc., exacerbate volatility - that's just common sense. 4) Platforms going down not allowing traders to unwind position, future brokers selling underlying in hedge programme exacerbate a reflexive response to further exacerbate the situation. It has happened previously, and volatility will occur again - given the current state or order books decentralisation, regulations etc. Next Steps 1) I am long and holding. Price topped-out at the top of a range and lows bounced-off swing traders costs basis - so there was buying at that level. 2) The market 'stabs' down i.e. probes the Order Book to the downside - it is normal to have further downside moves, but - check if down moves are accompanied by a pick-up of volume (selling at market) or due to lack of buying pressures - there's a difference! 2) Manage your risk by margining exposure to risk - don't use leverage (common sense, cryptos have plenty of volatility to make money) - greed doesn't pay! 3) We have seen larger moves in BTC and DOGE etc., this is not a unique position - so don't frame it as one ... just yet!
BITSTAMP:BTCUSD
by Adam-Cox
10
BTC - the market does NOT tell me to Sell.......yet :)BTC grinding towards the previously noted price target of $53-$54 mark. That coincides with closing price levels and swing traders' cost basis. SOPR is net positive with no material profit taking indicated by Realised Profit & Loss Indicator. BTC price risk in-part based on future spreads indicates a possible pullback - but that would be anticipated as price approaches this level anyway. Futures market yet to catch-up I think to the underlying. I am remaining Long BTC because the market is not telling me to 'SELL' :)
BITSTAMP:BTCUSDLong
by Adam-Cox
3
LTC Net Long - Positive Cost Basis and SOPR. LTC break above cost basis - most traders still HODL'ing with no material realised gains (profit taking) to note to date. SOPR indicates a few pundits chucked in the towel early (refer : arrow) , but LTC is now a net long market. My strategy Currently, trading long the SOPR breaks and pull backs above the Cost Basis line (market net profit line). Conditions may change, but that's like any other speculative activity - just monitor as per usual! Best of Luck :) #LTC #Crypto
BITFINEX:LTCUSDLong
by Adam-Cox
2
BTC- Key things to look out forTotal exchange volume, after reached ATH in early Jan, has since come back down, but is still much higher than it was a year ago. Fundamental- Grayscale’s Crypto AUM has recently surpassed $30 Billion lvl and it was mostly driven by hedge fund involvement. Average commitment is in uptrend as well. Fidelity Digital Assets President Tom Jessop is bullish on BTC along with Ray Dalio and Jordan Belfort (probably shouldn't mention him in the sentence as Dalio), both of them have been vocal critics of BTC until recently. Ray Dalio even went as far as claiming BTC as an alternative to gold-like assets. Crypto exchange River Financial recently launched a mobile platform for iOS, aiming specifically at the demographic over 50s. If boomers join the BTC bandwagon, their wealth can become a powerful driving force of BTC's price Derivative- CME's leveraged funds have been steadily reducing their short positions since late Dec. BTC futures volume, after reached its peak in mid Jan, has since come back down, but is still hovering around Dec. lvl. BTC futures OI on Binance, Okex and CME has exceeded 2 billion few days ago and is still at elevated lvl despite a minor drop today. Funding rate suggests that traders are moderately bullish On-chain- Recently, over $550 Million of BTC was transferred out of Coinbase Pro, which potentially indicated less selling pressure and more Hodl activity. The # of Bitcoin whales (entities holding ≥ 1k $BTC) is still increasing In January, more than 22.3 million unique addresses were active in the network sending or receiving $BTC, the highest monthly number in Bitcoin's history to date SOPR has recently reached 1, which means ppl are now less willingly to sell below the break-even price unless majority of them believe price will drop further because we are still in the bear market, which is an unlikely scenario. This could potentially mean the end of profit-taking and the resuming of uptrend. USDT issuance continues to climb up steadily so is StableCoin Supply Ratio (SSR), which might indicate more buying pressure to push up the BTC price.
by Libratus
2