Monitoring distance between two moving objects
You will not get the accuracy you need with wifi or Bt. Rssi is not reliable measure. Ultrasonic is an easy answer. Depending on your smartphones microphone frequency response you may get away with just adding an ultrasonic transmitter and use wifi and ultrasonic in tandem to figure out distance. Wifi would be instant and sound will be slower. You may have to pull tricks to eliminate wifi packet delays etc but I see that they can be worked out.