Double Bottom
In simple terms
A double bottom is when a cryptocurrency's price drops to the same low level twice, then bounces back up. It's like a ball bouncing twice at the bottom of a valley before rolling uphill—it suggests the price might be about to rise.
Definition
Bullish reversal signal after price reaches the same low twice.
In depth
A double bottom is a bullish reversal pattern that forms when price action touches a support level, rebounds, retraces back to test that same support level a second time, and then breaks above the intermediate resistance (neckline) between the two lows. This pattern indicates that sellers have been exhausted at that price point after two attempts to push lower, and accumulation by buyers at that support zone has strengthened enough to drive price higher. The confirmation requires price to close above the neckline with volume, signaling renewed buyer conviction.
How does Double Bottom work?
Price falls to a low, rebounds to an interim high, then falls back and holds near the first low rather than cutting through it. That second defence of the same area traces the W shape. The interim high between the lows becomes the neckline. The pattern is treated as complete only on a close above that high, conventionally with heavier volume on the second rally. The distance from the lows up to the neckline is then projected above the break as a rough reference. A second low that breaks well beneath the first cancels the formation.
An example
Illustratively, a coin drops to $20, bounces to $28, then slides back to $21 and turns up again. The neckline sits at $28. A close above $28 completes the double bottom, and the $8 low-to-neckline distance gives roughly $36 as a reference. The figures are invented. Price can also stall under $28 for months, or break to new lows instead.
Figures are illustrative only.
What beginners get wrong
- Insisting the second low match the first exactly discards valid formations, since a modest undercut or overshoot is entirely normal.
- Acting at the second low happens before any neckline break, and that level can simply fail on the next attempt.
- Volume on the second bounce is part of the evidence, so a listless drift into the neckline is weaker than a decisive push.
- No pattern removes downside risk, and a failed double bottom is often followed by a decline below both lows.
Related terms
Part of
What is technical analysis, and how are crypto charts read? — the subject page for technical analysis, with all 29 of its definitions in one place.
Educational only — not financial advice.