Silver (XAG/USD) – Double Top Breakdown Signals Bearish Reversal | 1H Chart Analysis
🕒 Timeframe: 1 Hour (H1)
💹 Pair: Silver vs. US Dollar (XAG/USD)
📍 Published: April 21, 2025
🔍 Technical Chart Pattern: Double Top Formation
A Double Top is a bearish reversal pattern that typically forms after a significant bullish rally. It indicates exhaustion in buying momentum and signals a shift in control from buyers to sellers.
🧩 Pattern Breakdown:
✅ Trend Context:
The asset was in a strong bullish trend leading up to this pattern.
A steep rally can often invite profit-taking, creating conditions for a reversal.
🟢 TOP 1 (First Peak)
Price surged upward and printed a peak at ~$32.88.
This marked a temporary ceiling where sellers entered with volume.
🔵 Support Zone / Neckline
After the first peak, price dropped to a support area near $32.20.
This zone acted as a neckline, crucial for confirming a breakdown.
🟢 TOP 2 (Second Peak)
Price rebounded from support but failed to break the previous high.
The second rejection at the same resistance signals buying fatigue.
A lower high or double rejection pattern often leads to reversal.
🔻 Neckline Break (Bearish Trigger)
Once price breaks below $32.20, it activates the double top.
This break is the entry confirmation for a short trade.
Traders could also enter on a pullback retest of the broken support as new resistance.
🎯 Trade Setup: Bearish Scenario
📌 Entry Options:
Aggressive Entry: On neckline break at $32.20.
Conservative Entry: On retest of neckline as resistance.
🎯 Take Profit Levels:
TP1: $32.06 – near-term minor support for partial booking.
Final Target: $31.29 – calculated using measured move technique:
Height from neckline to peak = ~$0.59
Target = Neckline ($32.20) - $0.59 = $31.61–$31.29 zone.
🔒 Stop Loss (SL):
Placed above both peaks at $33.16.
This provides protection in case of false breakouts or news volatility.
🧠 Market Psychology Insight:
The double top reflects a change in sentiment — from bullish exuberance to cautious selling.
Buyers who entered late may start exiting positions after repeated failures to push higher.
Sellers gain confidence after the second rejection and begin shorting aggressively.
This tug-of-war dynamic plays out as a supply zone forms at the double top resistance.
📊 Volume & Confirmation (If Available):
Ideally, confirmation should be backed by rising sell volume on the neckline break.
Divergences (e.g., RSI bearish divergence) may strengthen the signal, although not shown here.
📉 Strategic Notes:
This is a high-probability reversal pattern, especially when it follows an extended bullish move.
For risk-averse traders, wait for confirmation: a retest and failure of support turned resistance.
If price closes strongly below TP1 and breaks intraday minor support, expect acceleration toward the target.
📌 Trade Recap:
Entry Stop Loss Take Profit 1 Final Target Risk:Reward
$32.20 $33.16 $32.06 $31.29 ~1:2.5 to 1:3
📎 Summary:
This chart presents a textbook Double Top on Silver’s 1H chart with a clearly defined neckline, strong resistance zone, and room for downside. With good risk-to-reward and high technical clarity, this setup favors sellers. Smart trade management and patience for confirmation can improve execution quality.
🕒 Timeframe: 1 Hour (H1)
💹 Pair: Silver vs. US Dollar (XAG/USD)
📍 Published: April 21, 2025
🔍 Technical Chart Pattern: Double Top Formation
A Double Top is a bearish reversal pattern that typically forms after a significant bullish rally. It indicates exhaustion in buying momentum and signals a shift in control from buyers to sellers.
🧩 Pattern Breakdown:
✅ Trend Context:
The asset was in a strong bullish trend leading up to this pattern.
A steep rally can often invite profit-taking, creating conditions for a reversal.
🟢 TOP 1 (First Peak)
Price surged upward and printed a peak at ~$32.88.
This marked a temporary ceiling where sellers entered with volume.
🔵 Support Zone / Neckline
After the first peak, price dropped to a support area near $32.20.
This zone acted as a neckline, crucial for confirming a breakdown.
🟢 TOP 2 (Second Peak)
Price rebounded from support but failed to break the previous high.
The second rejection at the same resistance signals buying fatigue.
A lower high or double rejection pattern often leads to reversal.
🔻 Neckline Break (Bearish Trigger)
Once price breaks below $32.20, it activates the double top.
This break is the entry confirmation for a short trade.
Traders could also enter on a pullback retest of the broken support as new resistance.
🎯 Trade Setup: Bearish Scenario
📌 Entry Options:
Aggressive Entry: On neckline break at $32.20.
Conservative Entry: On retest of neckline as resistance.
🎯 Take Profit Levels:
TP1: $32.06 – near-term minor support for partial booking.
Final Target: $31.29 – calculated using measured move technique:
Height from neckline to peak = ~$0.59
Target = Neckline ($32.20) - $0.59 = $31.61–$31.29 zone.
🔒 Stop Loss (SL):
Placed above both peaks at $33.16.
This provides protection in case of false breakouts or news volatility.
🧠 Market Psychology Insight:
The double top reflects a change in sentiment — from bullish exuberance to cautious selling.
Buyers who entered late may start exiting positions after repeated failures to push higher.
Sellers gain confidence after the second rejection and begin shorting aggressively.
This tug-of-war dynamic plays out as a supply zone forms at the double top resistance.
📊 Volume & Confirmation (If Available):
Ideally, confirmation should be backed by rising sell volume on the neckline break.
Divergences (e.g., RSI bearish divergence) may strengthen the signal, although not shown here.
📉 Strategic Notes:
This is a high-probability reversal pattern, especially when it follows an extended bullish move.
For risk-averse traders, wait for confirmation: a retest and failure of support turned resistance.
If price closes strongly below TP1 and breaks intraday minor support, expect acceleration toward the target.
📌 Trade Recap:
Entry Stop Loss Take Profit 1 Final Target Risk:Reward
$32.20 $33.16 $32.06 $31.29 ~1:2.5 to 1:3
📎 Summary:
This chart presents a textbook Double Top on Silver’s 1H chart with a clearly defined neckline, strong resistance zone, and room for downside. With good risk-to-reward and high technical clarity, this setup favors sellers. Smart trade management and patience for confirmation can improve execution quality.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.