Double Bottom
A double bottom is a bullish reversal pattern where price tests a support level twice and bounces both times, forming two valleys at approximately the same price.
Understanding the Concept
This is the opposite of a double top and signals the downtrend is exhausted. Sellers tried to push lower twice and couldn't. That's capitulation. When price breaks above the peak between the two bottoms, you've got confirmation that buyers are back in control. The psychology is simple: everyone who wanted to sell has sold. There's no one left to push it lower. Now fresh buyers step in, and shorts start covering. Double bottoms at major support levels (like $20k for BTC) can mark generational lows. Miss these and you miss 10x opportunities.
Real-World Example
MATIC drops to $0.50, bounces to $0.65, falls back to $0.52, then bounces again. When it breaks above $0.65 with volume, that's your buy signal. The double bottom just confirmed the bottom's in.
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