Technical Glossary / Chart Patterns
V-Bottom
A sharp low: price reverses from decline to advance with almost no base.
Teaching sketch. It shows the shape, not a live quote and not a trade signal.
Definition
A V-bottom is a spike low and an immediate recovery. There is no saucer and no double bottom. Selling exhausts, often on a news flush or a liquidation, and price leaves the low as fast as it arrived.
How to identify it
A steep decline into a single low, then a steep rally that retraces a large part of the drop without building a base. The low is a single pivot.
Bullish reading
Confirmation is the speed of the reclaim and a break of the last lower high that started the final leg down. Risk is under the spike low, which is often uncomfortably far once the V is obvious.
Bearish reading
A return through the spike low fails it. V-bottoms that cannot hold the first bounce become new downtrends, and the spike was only a pause.
Common mistakes
Buying the low candle because it looks climactic. Climaxes can continue. The reversal is the rally afterward, not the red bar.
Limitations
Like V-tops, the pattern is clearest late. If you need a base and a retest, this pattern will not give you one. Many retests of V-bottoms undercut the low first.
This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.