V-Bottom (Spike Reversal)
Definition
A vertical plunge that reverses just as fast — capitulation and instant recovery.
Psychology
Straight down, straight up. Panic sellers hand shares to fast buyers.
Real-life analogy
💡 A ball hitting concrete — the harder the drop, the sharper the bounce.
Expected direction
up
Entry / Stop / Target
Entry: After price reclaims the first broken support level. · Stop: Below the spike low. · Target: Prior resistance zones on the way up.
Historical behaviour
Common at panic lows and flash crashes.
Illustrative success rate
Hard to anticipate · Low reliability
Common beginner mistakes
- • Catching the falling knife too early
Quick quiz — did you understand?
1. Is the V-Bottom (Spike Reversal) generally considered bullish, bearish, or neutral?
2. After a confirmed V-Bottom (Spike Reversal), the expected direction is usually:
3. Which is a common beginner mistake with the V-Bottom (Spike Reversal)?
Educational and probability-based analysis only. This is not financial advice and not a prediction of real market outcomes.