Double Bottom Pattern Strategy One of the technical analyzes to look for a price reversal point in the crypto market is to use a double bottom analysis. The pattern the double bottom pattern resembles the letter "W" because it touches the support line twice to identify a change in trend direction from a downtrend to an uptrend. The double bottom indication occurs at the end of a downtrend. It starts when the price moves lower, prints lower highs and lower lows, continuously resulting in a downward trend direction. For example in the following image on the left, the resistance level is in a downtrend.
From the downward price movement, traders are ready to analyze the double bottom, to look for a reversal of direction. In analyzing trends that tend to end, it is almost impossible for us to get two lows/support lines at the same price as the benchmark for the pattern is a double bottom. As long as these two lows are at the same price, it is considered sufficient to validate a pattern. The point is that the double bottom starts from a downward trend that has weakened and is followed as an uptrend reversal pattern.
The next validation is according to the illustration above, the double bottom pattern has been formed when the market re-breaks the resistance at the neckline. The most important thing in using this strategy is to know what price the potential target is, by looking for a simple resistance level above it. The following is a live example of the ETH market on August 29, 2022, using the 15M timeframe.
After the downward trend and forming a double bottom according to the analysis, you can buy (check at the price of 21.9 million IDR) on the market when confirmation breaks the neckline, then provide the first profit target at the last resistance during the downward trend (check at the price of 22.4 million IDR). As with other strategies, no strategy can work with accuracy up to 100%. There are times when you may experience floating loss if you identify it incorrectly.
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