Is the buy the dip holy grail or an illusion? Analysis of the round bottom pattern

Have you heard of “pot bottom”? In the crypto world, it is not about cooking, but rather a classic reversal signal.

In simple terms: when the price of the coin drops to a certain level, the speed of the decline begins to slow down → it repeatedly tests the bottom at a low level → the trading volume gradually expands from shrinking to moderate → the whole process looks like the arc of a pot bottom, this is called “round bottom”.

Why pay attention? Because this usually indicates that the bears' strength is weakening, and the bulls are about to launch a counterattack. The longer the formation drags on, the greater the potential for subsequent gains.

How to operate? Draw a line connecting the highest points on both sides of the bottom (referred to as the “neckline”), with three buying points:

1. When the price effectively stands above the neckline → Aggressive buy point
2. First pullback to the neckline after the breakout → Mild buying point
3. Confirm support before reaching new highs → Conservative buying point

Where's the pitfall? Trading volume and price must respond synchronously; it cannot just rise in price without an increase in volume, as that would be a false breakout. Moreover, the shorter the time it takes to form a pattern, the lower its credibility.

In one sentence: Don't rush to buy the dip, wait for the trading volume to support the breakout before getting on board, the risk will be a bit smaller.