Reversal BTCUSD Patterns

These patterns are formed after the btcusd market has had an extended move up or down and the bitcoin price reaches a strong resistance or support respectively.

When bitcoin price reaches such a point it starts to form a pattern. Since these formations are frequently formed it's easy to spot them once you learn how & begin using them. There are four types:

• Double Top
• Double Bottom
• Head and shoulders
• Reverse Head & shoulders

This learn bitcoin tutorial will only cover double tops and bottoms, for the other 2, read this other tutorial: head & shoulders and reverse head & shoulders

Double Tops

This is a reversal bitcoin pattern that forms after an extended upward trend. As its name implies, this formation is made up of 2 consecutive peaks that are roughly equal, with a moderate trough in between.

This setup is regarded complete once bitcoin price makes second peak & then penetrates lowest point between highs, called the neck-line. The sell cryptocurrency signal from this formation occurs when the btcusd market breaks below the neck line.

In Bitcoin, this formation is used as a early warning signal that a bullish bitcoin trend is about to reverse. However, it's only confirmed once the neck-line is broken and the btcusd market moves below neck-line. Neck line is just another term for the last support level formed on the Bitcoin chart.

Summary:

• Forms after an extended move upwards
• This formation indicates that there will be a reversal in btcusd market
• We sell when bitcoin price breaks out below the neck-line point: see below for explanation.

The double top look like an M-Shape, the best reversal cryptocurrency signal is where the second top is lower than the first one as shown below, this means that the reversal signal can be confirmed by drawing a downwards bitcoin trendline as shown below. If one opens a sell cryptocurrency signal the stop loss will be placed just above this downward bitcoin trend line.

M Shaped

Double Bottom

This is a reversal bitcoin pattern that forms after an extended down-wards trend. It's made up of 2 consecutive troughs that are roughly equal, with a moderate peak in between.

This setup is regarded complete once bitcoin price makes second low & then penetrates the highest point between lows, known as the neck-line. The buy indication from this bottoming out signal occurs when the btcusd market breaks the neck-line to the upside.

In Bitcoin, this formation is an early warning signal that the bearish bitcoin trend is about to reverse. It's only considered complete/confirmed once the neckline is broken. In this formation the neck-line is the resistance area for the bitcoin price. Once this resistance is breached the btcusd market will move upward.

Summary:

• Forms after an extended move downward
• This formation indicates that there will be a reversal in btcusd market
• We buy when bitcoin price breaks above the neck-line point: see below for explanation.

The double bottom pattern look like a W Shape, the best reversal cryptocurrency signal is where the second bottom is higher than the first one as shown below, this means that the reversal signal can be confirmed by drawing an up-wards bitcoin trendline as shown below. If a trader opens a buy cryptocurrency signal the stop loss will be placed just below this upward bitcoin trend line.

W Shaped