A swing low is a local bottom in price where the asset reaches a lower value than surrounding candles before reversing upward. It marks a point of temporary support where buying pressure overwhelmed selling pressure. Swing lows are essential reference points for measuring trend strength, calculating Fibonacci extensions and retracements, and identifying support levels where price might find buying interest during future pullbacks.
Example:
Bitcoin bottomed at $76,198 on April 8, 2025, creating a swing low as panic selling exhausted. This swing low became the starting point for measuring the entire bull run. Traders used this reference to calculate how far Bitcoin rallied ($124,000 peak = 63% gain), project Fibonacci extension targets for the next move, and identify where Bitcoin might find support during corrections. When Bitcoin pulled back to $85,000 later, the $76,000 swing low remained psychologically significant as a "worst-case" support level.