Value Days Destroyed

Definition ∞ Value Days Destroyed (VDD) is an on-chain metric that measures the economic significance of Bitcoin transactions by accounting for both the amount of BTC moved and the duration it remained dormant. When older coins are spent, the VDD value increases, indicating that long-term holders are moving their assets. This metric provides insight into the velocity of money and the behavior of seasoned investors. It signals shifts in market sentiment.
Context ∞ Analysts and news outlets often refer to Value Days Destroyed to assess whether market movements are driven by new capital or by the redistribution of older, long-held coins. High VDD spikes can sometimes signal capitulation events or significant profit-taking by long-term holders. This metric helps distinguish between different phases of a market cycle.