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Double Bottom Meaning

A double bottom is a technical analysis chart pattern that signals a potential trend reversal from bearish to bullish. It forms after a sustained price decline and is characterized by two distinct lows at approximately the same price level, separated by a moderate price rebound. This structure resembles the letter “W” and is widely used by traders to identify potential buying opportunities.

The logic behind the double bottom pattern is rooted in market psychology. The first bottom represents a point where selling pressure temporarily exhausts itself and buyers step in.

The subsequent rebound indicates some demand, but not enough to establish a new uptrend. When price revisits the same low and fails to break lower, it suggests that sellers are losing control.

A breakout above the interim high between the two bottoms often confirms the pattern. In cryptocurrency markets, double bottoms can appear frequently due to high volatility and rapid sentiment shifts.

Traders often combine this pattern with volume analysis, momentum indicators, or broader market context to reduce false signals. While the pattern does not guarantee a reversal, it provides a structured framework for assessing risk and potential upside.

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