BITCOIN VALUE DAYS DESTROYED MULTIPLE (VDD)
The Value Days Destroyed (VDD) Multiple chart is a key on-chain indicator for identifying potential Bitcoin market cycle tops and bottoms. It compares short-term spending value against the long-term baseline, acting as a momentum gauge for on-chain economic activity. By analyzing the ratio between recent and annual spending velocity, traders can effectively assess whether the market is becoming overheated or is in a period of accumulation.
BTC Price
VDD Multiple
BTC Value Days Destroyed Chart Explained: What Is It and How to Read the Chart?
Indicator Overview
The Value-Days-Destroyed (VDD) Multiple builds upon the concept of Coin-Days-Destroyed (CDD) to provide a market-timing tool. It is calculated in two main steps: Calculate VDD: First, the daily CDD value is multiplied by the Bitcoin price for that day (VDD = CDD * Price). This adjusts the raw spending velocity for its USD value, allowing for more accurate comparisons across different price eras.
Calculate the Multiple: The VDD Multiple is then calculated by dividing a 30-day moving average of VDD by its 365-day moving average. This creates a ratio that shows whether the recent, short-term spending value is elevated or depressed compared to the yearly average.
This indicator effectively highlights shifts in the behavior of long-term holders, valued in US dollars.
How To View The Chart
The VDD Multiple provides clear, actionable signals for identifying extremes in market cycles.High Values (Market Tops): When the VDD Multiple rises to high levels, it signifies that the USD value of old coins being spent is dramatically outpacing the yearly norm. This indicates that long-term holders are taking significant profits, increasing the liquid supply of BTC on the market. Historically, these periods of high spending value have aligned with major bull market peaks.
Low Values (Market Bottoms): When the multiple drops to low values, it suggests that the USD value of coins being spent is minimal compared to the annual average. This points to a market dominated by accumulation and strong holding sentiment, which has historically occurred during bear market bottoms when investor confidence is low but smart money is accumulating.