DOOKV: Is Bitcoin's on-chain bull run momentum over? Indicator flashes red

Bitcoin (BTC) OGs appear to be gearing up to cash in on their gains ahead of the Bitcoin halving, according to a leading indicator popular among crypto traders.

An indicator called the Value Days Destroyed (VDD) Multiple recently spiked above 4.0, leading crypto commentators to speculate that the wider market could be nearing the end of the bull run.

“Has on-chain momentum topped?” pseudonymous trader TXMC Trades asked their 83,200 X followers in an April 10 post.

The VDD Multiple is intended to highlight instances where the price of Bitcoin could be showing signs of overheating and nearing its peak during major market cycles.

A higher VDD Multiple reading indicates a larger number of Bitcoin quickly entering the market, likely to be sold.

It is measured by multiplying the existing Coin Days Destroyed metric by the current price of Bitcoin to compare spending velocity over time.

Currently, it stands at 3.03, having briefly surged to 4.21 on March 28. It has doubled since the beginning of this year when the VDD multiple hovered around 2.04 on Jan. 1, as per GlassNode data.

The last time the VDD multiple went above 4 was in January 2021, when Bitcoin was $40,257.

However, the brief peak before the cooldown didn't result in a market downturn, as Bitcoin's price promptly surged. Just two months later, Bitcoin’s price soared by 52.2% to $61,283 in March 2021, as per CoinMarketCap data.

It is now just nine days to the Bitcoin halving, and it has surpassed the levels observed before past halving events.

During the same timeframe preceding the last halving on July 9, 2016, the VDD multiple stood at 0.419, while it reached 1.606 10 days before the 2020 Bitcoin halving.