Aroon Indicator (AROON)

AROON measures the time since the highest high and lowest low within the lookback period, expressing each as a percentage: AroonUp = ((period - bars since highest high) / period) × 100; AroonDown = ((period - bars since lowest low) / period) × 100. With default 14-period, if the highest high was 2 bars ago, AroonUp = (14-2)/14 × 100 = 85.7%. Both lines oscillate between 0-100. Developed by Tushar Chande, AROON identifies emerging trends by tracking how recently new highs and lows occurred.

Cryptocurrency traders use AROON to identify trending versus ranging markets. When AroonUp is near 100 and AroonDown near 0, uptrend is strong (recent highs). When reversed, downtrend is strong. Both lines below 50 suggest consolidation with no clear trend. AroonUp crossing above AroonDown signals potential uptrend start; crossing below signals potential downtrend. AROON excels at early trend detection because it measures recency of extremes rather than just price levels. Combine with ADX for trend strength confirmation, with RSI for momentum alignment, or with moving averages for direction. Popular among trend followers and breakout traders.