Yes you can is the simple answer but is it good value – probably not.
Here is the upgrade chart for krisflyer miles. You can check your flight details to see if there is value in it
For example to upgrade Aus-Europe from economy to business costs 75,000 miles. That is 101,250 Velocity Points if transferring from Velocity. That is assuming you have booked a fare class that is eligible.
By comparison – To book the award outright costs 68,000 KF miles from east coast to the cheap europe zone or 80,750 KF to the expensive europe zone.
Also using the velocity points directly would cost 125,000 one way to Europe – so only a small difference.
These are one way prices. So you would be better off cancelling the ticket (assuming you can without penalty) and booking an award seat instead.
But some people love justifying using points for upgrades and justify it a different way – if that one way flight is worth $4000 to you and you paid the equivalent of $1000 for each leg of your Europe return then you are getting $3000 of value out of your 101,250 velocity points which is 2.96 cents per point. This is usually based on them not having paid the base economy fare themselves (travelling on business for example)
But if you were paying yourself you would still be better off using 68,000 miles for an outright redemption to the cheap europe zone then getting a cheap flight to the other city if it’s in the Expensive Europe Zone.
This example is just for Europe so do the maths on where you are flying from and too on the upgrade cost versus the outright redemption.