Indicator Overview

The indicator is the Active Address Sentiment Indicator (AASI). It is an on-chain metric that measures the short-term market sentiment by comparing the 28-day percentage change in Bitcoin's price against the 28-day percentage change in its Active Addresses. The core concept is to gauge how closely network usage (fundamentals) is aligning with market price movements (speculation). When one metric outpaces the other, it signals a potential misalignment between price and underlying network demand.

How To Use

The AASI effectively highlights moments when the market may be overheating or undervalued relative to its actual user base.

AASI Rises (Price > Addresses): When the percentage increase in price significantly outpaces active addresses, it indicates that the market momentum is running ahead of the actual user fundamentals. This often warns of short-term market overheating and potential overextension or euphoria, suggesting a correction may be necessary to realign price with usage.

AASI Falls (Addresses > Price): When the percentage increase in active addresses rises faster than the price, it suggests growing network demand and fundamental strength relative to the current valuation. This is often interpreted as a bullish sign of organic growth that supports future price appreciation.