BTC/USD – Double Bottom Reversal Pattern Forming a Bullish Setup
Chart Overview:
Timeframe: 45-minute chart
Instrument: Bitcoin vs US Dollar (BTC/USD)
Platform: Bitstamp via TradingView
Date: May 6, 2025
🔍 Technical Analysis Breakdown
1. Trend Context – Prior Downtrend
The price had been in a sustained downtrend, characterized by a series of lower highs and lower lows, until it found major support near the 93,223 level. This level acted as a demand zone, halting further declines and setting the stage for a reversal.
2. Reversal Formation – Double Bottom Pattern
Bottom 1: The first significant low was printed at the Support Zone near 93,223, marked with a strong bearish rejection.
Interim Bounce: The price bounced back to test a resistance area around 95,575, but failed to break higher.
Bottom 2: Price then revisited the same support zone (forming Bottom 2), but this time with diminishing bearish momentum, signaling potential exhaustion of sellers.
Neckline (Resistance): The interim swing high between the two bottoms formed a neckline at 95,575, which is the key breakout level for confirming this bullish reversal.
✔️ Double Bottom = A bullish reversal signal suggesting a shift from downtrend to uptrend.
3. Key Technical Levels
Type Price Level
Support (Bottom) 93,223
Resistance (Neckline) 95,575
Target (TP) 96,245
Stop Loss (SL) Below 93,223
4. Trade Setup (Based on Double Bottom Pattern)
Entry: On confirmed breakout above 95,575
Ideally with a strong bullish candle close and volume confirmation
Retest of the neckline can provide a secondary entry
Take Profit (TP): 96,245, calculated using the measured move technique:
Distance from the support to the neckline added above the breakout
Stop Loss (SL): Below 93,223, just under the second bottom
Protects against false breakouts or pattern failure
5. Projected Price Path (Forecast Arrows)
The chart visually maps out a potential bullish path:
Price breaks neckline at 95,575
Pullback to retest neckline (bullish confirmation)
Continuation to target zone at 96,245
Potential short-term consolidations before reaching the target
🧠 Technical Insight:
Volume Analysis (if added): A rise in volume on the breakout would confirm bullish strength.
Market Psychology: Sellers attempted to push lower twice but were rejected both times at the same support level, indicating the dominance of buyers and a shift in sentiment.
✅ Trading Bias: Bullish
This is a high-probability bullish reversal setup backed by classic price action. The clearly defined risk-to-reward ratio makes it attractive for swing or intraday traders.
💡 Professional Tip:
Always monitor momentum indicators (like RSI or MACD) for bullish divergence or confirmation signals, especially on the second bottom—this can strengthen the setup reliability.
Chart Overview:
Timeframe: 45-minute chart
Instrument: Bitcoin vs US Dollar (BTC/USD)
Platform: Bitstamp via TradingView
Date: May 6, 2025
🔍 Technical Analysis Breakdown
1. Trend Context – Prior Downtrend
The price had been in a sustained downtrend, characterized by a series of lower highs and lower lows, until it found major support near the 93,223 level. This level acted as a demand zone, halting further declines and setting the stage for a reversal.
2. Reversal Formation – Double Bottom Pattern
Bottom 1: The first significant low was printed at the Support Zone near 93,223, marked with a strong bearish rejection.
Interim Bounce: The price bounced back to test a resistance area around 95,575, but failed to break higher.
Bottom 2: Price then revisited the same support zone (forming Bottom 2), but this time with diminishing bearish momentum, signaling potential exhaustion of sellers.
Neckline (Resistance): The interim swing high between the two bottoms formed a neckline at 95,575, which is the key breakout level for confirming this bullish reversal.
✔️ Double Bottom = A bullish reversal signal suggesting a shift from downtrend to uptrend.
3. Key Technical Levels
Type Price Level
Support (Bottom) 93,223
Resistance (Neckline) 95,575
Target (TP) 96,245
Stop Loss (SL) Below 93,223
4. Trade Setup (Based on Double Bottom Pattern)
Entry: On confirmed breakout above 95,575
Ideally with a strong bullish candle close and volume confirmation
Retest of the neckline can provide a secondary entry
Take Profit (TP): 96,245, calculated using the measured move technique:
Distance from the support to the neckline added above the breakout
Stop Loss (SL): Below 93,223, just under the second bottom
Protects against false breakouts or pattern failure
5. Projected Price Path (Forecast Arrows)
The chart visually maps out a potential bullish path:
Price breaks neckline at 95,575
Pullback to retest neckline (bullish confirmation)
Continuation to target zone at 96,245
Potential short-term consolidations before reaching the target
🧠 Technical Insight:
Volume Analysis (if added): A rise in volume on the breakout would confirm bullish strength.
Market Psychology: Sellers attempted to push lower twice but were rejected both times at the same support level, indicating the dominance of buyers and a shift in sentiment.
✅ Trading Bias: Bullish
This is a high-probability bullish reversal setup backed by classic price action. The clearly defined risk-to-reward ratio makes it attractive for swing or intraday traders.
💡 Professional Tip:
Always monitor momentum indicators (like RSI or MACD) for bullish divergence or confirmation signals, especially on the second bottom—this can strengthen the setup reliability.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.