Indicator Overview

The Value Days Destroyed (VDD) Multiple is a high-conviction macro indicator designed to identify when Bitcoin’s price is becoming overextended and approaching major cycle tops. It builds upon the Coin Days Destroyed (CDD) framework, which tracks "lifespan" or conviction by weighting coins that haven't moved in long periods higher than those traded frequently.

By multiplying CDD by Bitcoin’s price, the metric accounts for the increasing dollar value of time-weighted spending as the network grows. The Multiple then compares near-term spending velocity (30-day average) against the yearly baseline (365-day average). When the 30-day average vastly outpaces the yearly average, it signals that long-term holders are divesting into market strength at an unsustainable rate, which is a classic hallmark of a market peak.

How To Use

Investors can use the VDD Multiple to distinguish between standard price appreciation and the frenzy associated with macro cycle blow-off tops.

• Heatmap Gradient: The indicator uses a colour-mapped line to visualise spending intensity. Dark Green segments indicate quiet accumulation or early-stage trends where the yearly average dominates. Transitions into Bright Green and Lime signal a rapid increase in old-coin distribution, often seen during the final stages of a bull market.

• The 30/365 Ratio: A VDD Multiple rising above 1.5 to 2.0 typically suggests the market is heating up. Historical cycle tops have often coincided with the Multiple reaching extreme levels (above 3.0+), indicating that the value being destroyed on-chain is significantly higher than the yearly norm.

• Smoothing & Averages: The script includes SMA and EMA toggles. Applying a 30-day or 50-day SMA to the Multiple can help filter out daily noise or large single-day whale movements, providing a clearer view of the structural trend in distribution.