What are Elder rays
Elder Rays is an indicator of technical analysis that helps to determine who dominates a particular crypto acting – buyers (bulls) or sellers (bears). It is worth noting that on the Internet and literature you can find a lot of names of this tool. In addition to the rays of Elder, the Russian -speaking segment also consumes the expression “power of bulls and bears” (“Bull Bear Power” or abbreviated BBP). Elder-ray index (literally “Elder’s Rays” and Elder-Ray Indicator (“Elder rays indicator”) are also found in English-speaking sources. The abundance of names can mislead inexperienced traders, but all these names mean the same thing and are calculated the same.
The calculation of the indicator
Elder’s rays are based on two components: the strength of the bulls and the strength of the bears. Therefore, at the initial stage, it is necessary to calculate the components. To do this, you will also need an exponential sliding medium (EMA). As a result, the formula for calculation will take on the following view:
The strength of the bulls = current maximum – EMA;
Power of bears = current minimum – EMA
Most often, the calculations use the exponential average for 13 periods (days, weeks, months, and so on). After both components are determined, the indicator itself calculates directly:
“The power of the bulls” and “the power of the bears” = the strength of the bulls + the strength of the bears
Modern applications and platforms make it possible not to make a calculation independently, since it is made automatically. The only parameter that needs to be introduced is the periods of the exponential average.
Having dealt with the calculation of the indicator, let’s move on to its use in real auction.
Trade with the help of Elder rays
Alone, Elder rays are rarely used. Most often, they are used in combination with other technical analysis tools, which can be the same sliding medium or bands of a bellinger.
When trading, the first thing is determined by the cryptocurrency trend. For this, for example, you can see where the price is located relatively sliding average: if higher, then it is ascending, if lower, then downward. Next move to Elder’s rays. In the case of an ascending trend, the purchase signal will appear when the indicator is in a negative area, but grows.
For example, this situation arose on August 3, 2025 on the daily chainlink schedule. The price of cryptocurrencies rose above the 50-day EMA, while the “power of bulls and bears” was in a negative zone, but grew. A purchase signal arose.
Source: TradingView.com
The situation when you need to sell is the opposite: the presence of a descending trend is necessary, and Elder’s rays should be in a positive area and fall. A striking example of such a situation occurred with bitcoin in June 2021. Then a protracted descending trend was observed and the price was long below the 50-day EMA. And Elder’s rays in the middle of the month were in a positive zone, but quickly sank down.
Source: TradingView.com
It is also worth paying attention to divergence – the discrepancy between the price and the indicator. Often she warns of the turn of the trend. For example, the price of bitcoin in October-November grew, but Elder’s rays, although they were in a positive zone, showed a lower value, causing a bear divergence. In the figure below, this discrepancy is shown by purple arrows:
Source: TradingView.com
The above examples show that to earn money with the help of Elder’s rays is possible on different cryptocurrencies. But do the indicator really have no shortcomings?
The disadvantages of Elder’s rays
The main disadvantage of Elder’s rays is in delayed signals. Very often, the movement up or down is already going on for some time, and the indicator only showed that it was necessary to make a deal. In addition, it is impossible to use Elder’s rays yourself. It is necessary to combine them with other trend indicators. The use of various tools, together with Elder’s rays, requires an individual, often subjective approach, which is not suitable for everyone.
The creator of the indicator
Elder rays were first described by the Soviet-American trader and psychiatrist Alexander Elder. The indicator got its name due to the fact that with its help traders can “enlighten the market” like doctors during an X -ray study.
Conclusion
Elder’s rays are an indicator that can help determine the balance of the forces of bulls and bears from a particular cryptoactive. The index gives the best results when used with other trend tools.
This material and information in it is not an individual or other other investment recommendation. The view of the editorial office may not coincide with the opinions of analytical portals and experts.
Source: Bits
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.
