AASI Indicator
Advanced Accumulation/Sentiment Indicator that identifies market phases through combined accumulation and sentiment analysis
AASI Indicator
Identifies accumulation and distribution phases through combined price momentum and sentiment analysis
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Above 50: Accumulation | Below 50: Distribution
Understanding AASI: AASI combines accumulation patterns (price stability + momentum) with sentiment analysis (short vs long-term trends). Values above 50 indicate accumulation by major players, while values below 50 indicate distribution. The indicator is particularly effective at identifying institutional behavior before significant price moves.
AASI Market Phases
Accumulation vs Distribution: Accumulation occurs when major players build positions during periods of low volatility and stable prices, typically in bear markets. Distribution happens when institutions exit positions during high volatility periods, often after extended rallies. AASI identifies these phases by analyzing price patterns characteristic of smart money behavior.
Phase Interpretation Guide
- • Low volatility with stable prices
- • Major players building positions
- • Often occurs in bear markets
- • Best time for long-term entries
- • Longer duration = stronger rally ahead
- • High volatility with erratic prices
- • Major players exiting positions
- • Often occurs after extended rallies
- • Time to take profits or reduce exposure
- • Longer duration = deeper correction ahead
Key Transition Signals
Accumulation Analysis: Measures accumulation vs distribution phases
Understanding AASI
The Advanced Accumulation/Sentiment Indicator (AASI) is a composite metric that identifies whether Bitcoin is in an accumulation or distribution phase. It combines two key components: (1) Accumulation Score based on price stability and momentum, and (2) Sentiment Score derived from short-term vs long-term price trends.
AASI values range from 0 to 100, where values above 50 indicate accumulation and values below 50 indicate distribution. The indicator is particularly effective at identifying when major market participants (whales and institutions) are building or reducing positions, often before significant price movements occur.
Unlike pure sentiment indicators, AASI incorporates price volatility patterns that are characteristic of accumulation (low volatility, steady prices) and distribution (high volatility, erratic prices). This makes it more reliable for identifying genuine market phases rather than temporary sentiment swings. The 7-day smoothing helps filter out noise while maintaining responsiveness to real trend changes.
Key Features:
- • Accumulation Detection: Identifies when major players are building positions during low volatility periods.
- • Distribution Warning: Signals when institutions are exiting positions, often preceding price drops.
- • Sentiment Integration: Combines price action sentiment with accumulation patterns for robust signals.
- • Phase Duration Tracking: Shows how long current accumulation/distribution phase has persisted.
How to Use AASI
For Buying Strategy:
AASI above 60 (Accumulation zone) indicates major players are building positions. This is typically the best time to accumulate, especially when AASI exceeds 75 (Extreme Accumulation). These periods often occur during bear markets or after significant corrections when weak hands have sold.
For Selling Strategy:
AASI below 40 (Distribution zone) signals that major players are reducing positions. Consider taking profits or reducing exposure when AASI drops below 25 (Extreme Distribution), as this often precedes significant price declines. Distribution typically occurs after extended rallies.
For Market Timing:
The transition between phases is crucial. When AASI crosses above 50 from below, it signals the shift from distribution to accumulation (bullish). When AASI crosses below 50 from above, it signals the shift from accumulation to distribution (bearish). These crossovers can mark major trend changes.
Phase Duration Analysis:
Longer accumulation phases (>90 days) typically lead to stronger rallies. Longer distribution phases (>60 days) often precede deeper corrections. Use phase duration to gauge the strength of the subsequent move. Short phases may indicate false signals.
Pro Tips:
- • AASI > 75 = Extreme accumulation - strong buy signal
- • AASI 60-75 = Accumulation - good buying opportunity
- • AASI 50-60 = Mild accumulation - cautiously bullish
- • AASI 40-50 = Mild distribution - cautiously bearish
- • AASI 25-40 = Distribution - consider selling
- • AASI < 25 = Extreme distribution - strong sell signal
- • Watch for 50-line crosses (trend changes)
- • Longer phase duration = stronger subsequent move
- • Combine with volume analysis for confirmation
- • Best for position sizing over weeks/months
Calculation Methodology
AASI combines two metrics: (1) Accumulation Score (0-100) based on 30-day price momentum and volatility - low volatility with stable/rising prices scores high, and (2) Sentiment Score (0-100) comparing 14-day vs 50-day trends - positive divergence scores high. The final AASI is a 50/50 weighted average of these components, smoothed over 7 days. Values above 50 indicate net accumulation, while values below 50 indicate net distribution. The indicator synthesizes price action patterns typical of institutional accumulation and distribution.
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