Bitcoin (BTC) may be approaching the end of its macro bull run, according to a historically accurate on-chain metric. The value days destroyed (VDD) multiple, which has accurately predicted previous BTC price tops, has reached a “rare” high. Despite the optimism of some who believe that BTC price discovery will continue, analysts who analyze on-chain signals are becoming concerned. One such analyst is TXMC, who shared fresh VDD multiple data on YouTube channel Alpha Beta Soup, revealing that the chart showed highs that were only seen shortly before BTC/USD reached macro tops. The VDD multiple compares on-chain spending to historical averages to determine when market psychology is indicating a blow-off top for price. The “value days destroyed” component measures the number of days that coins were previously dormant when used on-chain. Although the VDD multiple reached around 3.5 in March, TXMC described it as “overheated” and stated that it was “not perfect, but notable.” However, there is a key difference between this year and early 2021. During the last spike in the VDD multiple, BTC/USD had already doubled its previous all-time high of $20,000. This time, the value is being printed while BTC/USD is still at its previous all-time high, leading to an “uncertain” overall picture, according to TXMC. On the other hand, there are some chart metrics, such as the relative strength index (RSI), that are giving traders reasons for cautious optimism. The RSI recently experienced a “reset” to levels last seen in late January, indicating that it may be time for a bounce in a strong bullish trend. Additionally, there is a hidden bullish divergence on the 4-hour RSI timeframes, signaling a possible uptrend continuation. Monthly timeframes are also holding above 70, which is a positive sign for Bitcoin’s upcoming block subsidy halving. It’s important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any decisions.
Bitcoin's Relative Strength Index indicates potential short-term gains as the metric suggests a price peak for BTC.