Double Bottom Pattern
Two troughs at similar support levels followed by a break above the intermediate peak. Looks like a "W" on the chart.
Trading rules at a glance
- Entry
- Long on close above the neckline.
- Stop Loss
- Just below the second bottom.
- Target
- Distance from bottoms to neckline, projected upward.
How the Double Bottom forms
Price falls to a support, bounces to form an intermediate peak, then falls again to retest the same support and bounces. The pattern is confirmed when price breaks above the intermediate peak.
How to trade it
- Spot in a downtrend, not after short corrections.
- Both bottoms should be at the same price with the second ideally slightly higher.
- Wait for a clean break of the neckline.
- Confirm with rising volume on the breakout.
Common mistakes to avoid
- Buying on the second dip before the neckline breaks.
- Confusing a range with a double bottom.
- Ignoring broader trend.
Real-world example
Bitcoin formed a double bottom near 28,000 in mid-2023 before rallying to over 73,000 in early 2024. The neckline sat around 31,500, which once broken accelerated the uptrend.
Best timeframes
The Double Bottom works best on 4H, Daily, Weekly charts. It can appear on lower timeframes but signal reliability drops significantly below the 1-hour chart.
Related patterns
Head and Shoulders
Three-peak formation that marks the end of an uptrend and the start of a downtrend. One of the most reliable reversal patterns in technical analysis.
Inverse Head and Shoulders
Mirror image of the head and shoulders pattern. Forms at the end of a downtrend and signals a bullish reversal.
Double Top
A resistance level tested twice without breaking, signaling the end of an uptrend. Looks like an "M" on the chart.
Rising Wedge
Price grinds higher between two upward-sloping trendlines that converge. Typically breaks downward.