Blockchain and Cryptocurrency Advanced - How to Interpret This Indicator from Its 3 Phases: The Period of Rest, Awakening, and The Meal Phase

How do we interpret this indicator from its 3 phases: the period of rest (or sleep), awakening, and the meal phase

Alligator Rest/Sleep

The Alligator Rest or Sleep basically means that there is indecision in the market or the market is consolidating or ranging. This is seen on the Alligator indicator as the Jaw, the Teeth, and the Lips of the Alligator indicator are closed or joined together or there is an intertwine between the moving average lines. During a ranging market or when the market is in consolidation, there is no visible trend or direction in the market. This means that the buyers and sellers are at an equilibrium. When this happens, traders do not take any position when the Alligator is Resting/Sleeping.

BNB/USDT Chart

Alligator Awakening

Alligator awakening basically means that there is a potential trend forming after the indecision or consolidation in the market. This is seen as the Jaw, the Teeth, and the Lips of the Alligator indicator are wide apart from each together after the phase where it was joined together or closed. When this happens, it means that the Alligator is hungry and is looking for food (trend direction). The direction the alligator decides to hunt for food, indicates the trend direction. This can either be bullish or bearish. The formation of the Alligator Jaw, teeth and lips would indicates the direction of the trend.

BNB/USDT Chart

Alligator Meal/Eating

Alligator having a meal or eating basically means that there is a trend in the market, either bull or bear. The alligator is either eating the bulls or eating the bears. At this phase, traders begins to follow the trend and take profits. Once the alligator has eating enough, it goes back to rest or sleep.

BNB/USDT Chart

Based on the layout of its three moving averages that make up the Alligator indicator, how one can predict whether the trend will be bullish or bearish

The alligator indicator has proven to be a really powerful and effective indicator when it comes to predicting the direction of a trend whether it is bullish or bearish. The 3 moving average lines (Jaw, teeth and lips) of the Alligator indicator helps to indicate the trend direction on whether it is bullish or bearish.

For uptrend, When the three moving average lines – the jaw, teeth and lips are wide apart from each other, and the Lips (green line) is at the top, the Jaw (blue line is at the bottom) and the Teeth (red line) is in the middle and also the price is above the jaw, teeth and lips moving average lines, it means that the trend is bullish or the market is moving in an uptrend.

BNB/USDT Chart

For downtrend, when the jaw, teeth and lips are wide apart from each other, and the Jaw (blue line) is at the top, the Lips (green line) is at the bottom and the Teeth (red line) is in the middle, and also the price is below the jaw, teeth and lips moving average lines, it means that the trend is bearish or the market is moving in a downtrend. This means that the Alligator is awake and is eating.

BNB/USDT Chart