AASI (Adjusted Active Supply Index)
The Adjusted Active Supply Index (AASI) measures the proportion of Bitcoin's circulating supply that is actively moving on-chain. This on-chain metric helps identify accumulation and distribution phases by tracking changes in holder behavior and coin movement patterns.
Understanding AASI
What is Active Supply?
Active supply represents the percentage of Bitcoin that has moved on-chain within a specific timeframe. When supply becomes more active (higher AASI), it suggests increased trading, profit-taking, or redistribution. Declining active supply indicates accumulation behavior where holders are less willing to sell, often occurring during market bottoms or consolidation phases.
Market Cycle Implications
AASI typically rises during market euphoria as investors actively trade and take profits, moving coins from cold storage to exchanges. During bear markets and bottoming processes, AASI declines as strong hands accumulate and coins move into long-term storage. This behavioral pattern makes AASI a valuable tool for identifying cycle phases.
Threshold Levels
The indicator includes historical threshold bands that mark extreme readings. High AASI levels (upper band) have historically coincided with market tops and distribution phases. Low AASI readings (lower band) often signal accumulation zones and potential market bottoms where long-term holders are absorbing supply.
Trading Strategy
Investors use AASI to gauge market sentiment and holder conviction. Declining AASI during price weakness suggests strong accumulation and limited selling pressure, a bullish sign for medium-term outlook. Rising AASI during rallies, especially at elevated price levels, warns of distribution and potential exhaustion. Combining AASI with price action helps identify optimal risk-reward scenarios.