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The Double top pattern reflects the exhausted bullish momentum as the prices revert from the same swing high and trigger a significant downfall.
It is a bullish reversal pattern often found at the market tops. Thus, concerning a steady bullish where prices make new higher highs, at points comes when buyers are unable to rise higher and mostly turn down from the prior swing high.
The pattern is quite easy to identify, and it forms the structure of the letter ‘M.’ Thus, the second reversal from the overhead resistance indicates buying momentum has exhausted, and the bullish trend might be over.
The bullish reversal plunged below the last swing low support indicating the pattern completion.
The last swing low acts as neckline support for this double top chart pattern; therefore, once the price breach this level indicates the sellers have wrestled control from buyers. The breakdown candle closing below the neckline triggers this pattern and can take entry at the following retest phase. The retest activity usually validates whether the breakdown is genuine or not, as the price reverts to the neckline and for sustained bearish momentum.
From the breakdown point, the short sellers can grab the same points; the coin chart shows between the neckline and overhead resistance.
Example-
From Mid Dec of 2021 to early Jan of 2022, the AR/USDT pair showcased a double top pattern as the price turned down twice from the $66.2 resistance. On Jan 7th, the price gave a massive breakdown from its neckline support of $52.5. Thus the resulting downfall tumbled the coin by 47% and hit the $27.5 mark
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