Bitcoin’s Cycle Structure Under Scrutiny As VDD Echoes Historic Market Tops
Bitcoin's supposed cyclical predictability just hit a major snag—VDD multiples are flashing patterns eerily similar to previous cycle peaks.
Technical Breakdown
The Value Days Destroyed metric, a key on-chain indicator, is mirroring formations that preceded major corrections in 2018 and 2021. It's not just whispering—it's shouting comparisons to periods when BTC shed 50% or more of its value.
Market Psychology at Play
Traders are grappling with the dichotomy of strong fundamentals against these technical warnings. The same indicators that called past tops are now painting a concerning picture, suggesting this cycle might not follow the script everyone banked on.
Institutional Impact
Wall Street's embrace creates new variables—ETF flows and corporate adoption might be rewriting the rules entirely. Traditional cycle models weren't built for this level of mainstream penetration.
Remember: past performance doesn't guarantee future results—especially when traditional finance gets involved and tries to 'improve' things with their usual flair for timing things perfectly wrong.
Value Days Destroyed Signals Potential Relief For Bitcoin
According to Darkfost, the Value Days Destroyed (VDD) metric is offering crucial insights into Bitcoin’s current market structure. Much like Coin Days Destroyed (CDD), VDD tracks the movement of older coins, but it adds another LAYER by weighting this activity according to price. This adjustment introduces the concept of “value destruction,” giving more weight to long-term holders selling when BTC prices are higher, and less when they are lower. As a result, VDD provides a more nuanced picture of the influence older coins exert on the market.
Recently, VDD reached a level of 2.4, a threshold historically associated with significant selling pressure. In past cycles, spikes to this range have often marked moments when long-term holders locked in profits, contributing to local tops or sharp corrections. The latest spike aligned with Bitcoin’s push to its all-time high, reflecting the familiar pattern of dormant supply resurfacing at peak prices.
However, VDD has since been declining, now approaching levels similar to those seen during prior correction phases. This suggests that the intensity of selling from long-term holders is easing. If this trend continues, the market may find relief from one of its most persistent sources of supply pressure.
Ultimately, easing VDD levels could set the stage for renewed upward momentum, but the key factor will be demand. Without strong inflows and renewed conviction from buyers, the reduction in selling pressure alone may not be enough to spark a sustainable rally. Still, the moderation of long-term holder activity is a promising sign that Bitcoin could stabilize and prepare for another attempt higher in the coming weeks.
Price Action Details: Pushing Above $110K
Bitcoin is currently trading at $112,286, showing a slight recovery after weeks of selling pressure that pulled the price down from its recent all-time high NEAR $123,217. The chart reveals that BTC is still consolidating within a corrective structure, testing the mid-range between support and resistance levels.
The 50-day moving average (blue line) is trending above the current price, acting as near-term resistance around $115K, while the 100-day moving average (green line) sits close to current levels, providing a short-term pivot point. The 200-day moving average (red line) is much lower at $101K, serving as a deeper structural support if bearish pressure intensifies.
BTC is forming higher lows after its recent dip to the $110K area, signaling that buyers are cautiously stepping back in. However, momentum remains limited, and the chart shows the market has yet to reclaim any major resistance levels. A breakout above $115K WOULD be needed to shift sentiment and open the way toward retesting the $120K–$123K zone.
Featured image from Dall-E, chart from TradingView
