Double Bottom

A double bottom is a bullish reversal pattern in which price falls to roughly the same low twice, separated by a bounce, and then breaks above the high between the two troughs. The shape resembles the letter W. The pattern signals that sellers tried twice to push price lower and failed both times, suggesting supply at that level is exhausted; when price clears the intervening high — the neckline — short sellers covering and new buyers entering can fuel a sustained move up.

For example, suppose Bitcoin drops to $52,000, bounces to $56,000, falls back to $52,300, and then rallies. A daily close above $56,000 confirms the double bottom, and the classical measured target projects the pattern's height upward — about $60,000 here. Ideally the second low forms on lighter volume than the first, showing selling pressure drying up, while the neckline breakout comes on expanding volume.

A common misconception is that two similar lows are themselves a buy signal; until the neckline breaks, the pattern is unconfirmed, and support tested repeatedly can eventually fail, turning the would-be double bottom into a breakdown. The two lows also rarely match exactly — the second often undercuts the first slightly, sweeping stop-losses before reversing, which many traders consider a stronger version of the pattern.