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Reversal K-line Pattern - Double bottom _ W Bottom_
10 March 18:34
Let's study more about Reversal K-line Pattern - Double bottom
Definition:
Double bottom
A double bottom pattern is a technical analysis charting pattern that describes a change in trend and a momentum reversal from prior leading price action. It describes the drop, a rebound, another drop to the same or similar level as the original drop, and finally another rebound.
The double bottom looks like the letter "W". The twice-touched low is considered a support level.
The double bottom pattern always follows a major or minor downtrend in a particular way, it is the reversal signal and the beginning of a potential uptrend.
As shown in the following picture :
The technical characteristics of the double bottom
Appears in a downtrend or at the end of a mid-term adjustment.
The two lows are at the same price level, or the right low is slightly higher. There are very few double bottoms where the right low is lower than the left low.
The trading volume of the low point on the right side of most double bottoms is smaller than that on the left side, but when the second rises, the general trading volume will be larger than the first rebound.
The neckline of the double bottom is generally the horizontal line after the first rebound high. Occasionally tilted slightly for morphological reasons
The technical meaning of double bottom
The double bottom is a technical pattern of bullish reversal, indicating that the currency price has bottomed out and rebounded, which is a buy signal.
The neckline of the double bottom is generally a horizontal line drawn through the high point of the first rebound. After the neckline breaks through, it supports the currency price.
When the double bottom pattern breaks through the neckline, if there is no heavy volume, then the effectiveness of the breakthrough is questionable. Traders should watch more and move less, and enter the market boldly after the currency price retest is confirmed to be valid.
The double bottom reflects the change in the strength of buyers and sellers. Like the head and shoulders bottom and the round bottom, it perfectly interprets the definition of a bull market in Dow Theory. Based on the principle that the back bottom is higher than the front bottom, the right bottom of the double bottom is generally higher than the left bottom. After the neckline is broken, the back high is higher than the previous high, and a bull market or a mid-term uptrend begins.
Generally speaking, a double bottom with a time period of more than one month is a more reliable double bottom technical meaning.
Example of BTC real order
In the 9-30BTC market, a double bottom pattern was formed at the bottom after the continuous decline, and then the currency price broke through the neckline with heavy volume, ushering in a wave of strong rises.
In the 11 consecutive days of rising, the currency price rose from $41,000 to $57,000, with a maximum increase of 41%.
Disclaimer:
This article is for reference only.
Such information provided by Gate.io does not constitute any investment advice and is not responsible for any of your investments.
Regarding technical analysis, market judgment, trading skills, trader sharing, etc., may involve potential risks, investment variables and uncertainties.
This article does not provide or imply any opportunity to guarantee profits.
Definition:
Double bottom
A double bottom pattern is a technical analysis charting pattern that describes a change in trend and a momentum reversal from prior leading price action. It describes the drop, a rebound, another drop to the same or similar level as the original drop, and finally another rebound.
The double bottom looks like the letter "W". The twice-touched low is considered a support level.
The double bottom pattern always follows a major or minor downtrend in a particular way, it is the reversal signal and the beginning of a potential uptrend.
As shown in the following picture :
Appears in a downtrend or at the end of a mid-term adjustment.
The two lows are at the same price level, or the right low is slightly higher. There are very few double bottoms where the right low is lower than the left low.
The trading volume of the low point on the right side of most double bottoms is smaller than that on the left side, but when the second rises, the general trading volume will be larger than the first rebound.
The neckline of the double bottom is generally the horizontal line after the first rebound high. Occasionally tilted slightly for morphological reasons
The technical meaning of double bottom
The double bottom is a technical pattern of bullish reversal, indicating that the currency price has bottomed out and rebounded, which is a buy signal.
The neckline of the double bottom is generally a horizontal line drawn through the high point of the first rebound. After the neckline breaks through, it supports the currency price.
When the double bottom pattern breaks through the neckline, if there is no heavy volume, then the effectiveness of the breakthrough is questionable. Traders should watch more and move less, and enter the market boldly after the currency price retest is confirmed to be valid.
The double bottom reflects the change in the strength of buyers and sellers. Like the head and shoulders bottom and the round bottom, it perfectly interprets the definition of a bull market in Dow Theory. Based on the principle that the back bottom is higher than the front bottom, the right bottom of the double bottom is generally higher than the left bottom. After the neckline is broken, the back high is higher than the previous high, and a bull market or a mid-term uptrend begins.
Generally speaking, a double bottom with a time period of more than one month is a more reliable double bottom technical meaning.
Example of BTC real order
In the 11 consecutive days of rising, the currency price rose from $41,000 to $57,000, with a maximum increase of 41%.
Disclaimer:
This article is for reference only.
Such information provided by Gate.io does not constitute any investment advice and is not responsible for any of your investments.
Regarding technical analysis, market judgment, trading skills, trader sharing, etc., may involve potential risks, investment variables and uncertainties.
This article does not provide or imply any opportunity to guarantee profits.
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