AASI | QR

AASI | QR — Active Address Sentiment Index

What it is
AASI | QR is a market activity gauge that compares on-chain participation (Active Addresses) with price momentum. It highlights regimes where network usage accelerates/decelerates relative to price and uses adaptive bands to flag expansions that may precede trend continuation or fade. Designed for BTC (and any symbol with an “Active Addresses” feed), it provides clear, visual context rather than trade calls.
How it works (principle, not code)

Active Address Momentum (core signal)
The script measures the rate of change (ROC) of Active Addresses and builds dynamic, volatility-scaled bands around zero. When address momentum pushes into progressively higher (or lower) bands, it reflects broadening (or narrowing) participation.

Price Momentum Overlay (context)
A price ROC runs alongside address momentum so you can visually compare participation vs. price. This helps distinguish healthy trend strength (price rising with rising participation) from potential exhaustion (diverging behavior).

Adaptive Bands (regimes)
Bands (±1×, ±2×, ±3× of the dynamic scale) expand/contract with recent variability in address momentum. The background tint optionally highlights strong expansions:
• Upper expansions → potential risk-on phases
• Lower expansions → potential risk-off phases
No fixed overbought/oversold thresholds are hard-coded; the bands adapt to the current regime, which helps keep the tool relevant across market phases.

Why this is useful (originality & value)
Most momentum overlays watch price alone. AASI adds a behavioral layer by tracking how many participants are active while price moves. This helps:
Separate euphoric spikes (price up, participation flat/falling) from broad advance (price up, participation rising).
Spot early cooling (participation momentum fades before price) and late accelerations (fresh participation kick).
Maintain clarity via adaptive scaling, so signals don’t go “permanently stretched” in strong cycles.
What you see on the chart
Zero Baseline with three up/down bands (±1, ±2, ±3).

Active Address ROC (soft line, main signal).
Price ROC (overlay line for context).
Optional background tint when price ROC reaches the upper or lower adaptive zones.
Clean presentation: the script is self-contained and readable without other overlays.

Inputs & customization
Bands & Trend: toggle visibility of ±1/±2/±3 bands.
Active Address & Price: toggle the address ROC and price ROC plots.
Color Mode: switch palettes to match your layout.
Lookbacks: the internal dynamic scaling is derived from recent variability of address momentum (kept simple for usability).

How to use it
Confluence: Look for price ROC and address ROC moving in the same direction and entering higher bands → strengthens the risk-on case.
Divergence: Price pushing higher while address ROC stalls or falls toward lower bands → participation not confirming; be cautious.
Regime shifts: When address ROC crosses the zero line and sustains inside ±1/±2 bands, it often marks a state change (cooling → heating or vice-versa).

Combine responsibly: Use with your risk framework (position sizing, stops). AASI is context, not an auto-trader.

Scope & data notes
Designed for BTC with a GLASSNODE:BTC_ACTIVEADDRESSES series.
Can be applied to other assets only if a comparable “Active Addresses” feed exists for that symbol. If no feed is present, use price ROC alone just for context (reduced informational value).
The script relies on close-form series provided on TradingView; no external links or delegation required to interpret its purpose.
Chart-publishing guidance
Publish with a clean chart showing only AASI to keep outputs identifiable.
If you add drawings, use them strictly to illustrate where participation confirmed or diverged from price.

Limitations
On-chain participation data can be noisy around events, holidays, or network anomalies.
Adaptive bands reflect recent variability; sudden structural changes may require time to re-scale.
Not a buy/sell system; it’s a diagnostic layer for regime awareness and confirmation.

Disclaimer
This tool is for research and educational purposes only and is not financial advice. Trading and investing involve risk, including loss of capital. Past performance does not predict or guarantee future results. Always validate settings on your timeframe and use proper risk management.