🧱 Chart Pattern Identified: Double Top Formation
The chart displays a classic Double Top pattern, a bearish reversal structure typically found at the end of an uptrend. This pattern forms when price reaches a resistance level twice, fails to break above it both times, and eventually breaks the neckline/support level, confirming a shift in market sentiment.
🔍 Key Components of the Chart:
1. Resistance Level (Tops) – ~$34.25
The market formed two significant peaks around the same level — labeled Top 1 and Top 2.
This level has proven strong resistance, as price was rejected both times after testing this zone.
This zone is marked with a light orange rectangle and a horizontal blue line labeled "Resistance Level".
2. Support Level (Neckline) – ~$28.80
This level served as the neckline of the Double Top.
After the second top, the price sharply declined and is currently approaching this key support zone, highlighted again in light orange.
A clean break and close below this zone on the weekly timeframe will be a strong confirmation of the bearish reversal.
3. Trendline Break – Bearish Shift in Momentum
A rising black dashed trendline supported the prior uptrend.
Price action has now broken below this trendline with strong bearish momentum, indicating that buyers have lost control.
This trendline break adds confluence to the bearish setup, supporting the validity of the pattern.
4. Bearish Projection Target – ~$22.47
The target is projected using the height of the Double Top pattern.
Measured from the resistance level ($34.25) to the support ($28.80), the vertical distance is ~5.45 USD.
Subtracting this from the neckline gives us a projected target:
28.80 - 5.45 = ~23.35 (rounded down to ~22.47 for technical cluster support).
This target area is marked with a blue arrow and labeled "Target" near the horizontal support at $22.47.
5. Stop Loss – ~$34.25
The logical invalidation point is placed just above the resistance zone and the second top.
A move above this level would invalidate the double top pattern, signaling that bulls have regained control.
📈 Price Action and Candlestick Behavior
The strong bearish weekly candle that broke below the trendline shows a decisive shift in sentiment.
The candle's large body and long range confirm institutional selling interest.
Volume (if shown) would likely support the move, but even price structure alone is highly telling here.
🎯 Trading Strategy & Setup
Component Details
Entry On a confirmed break and retest of $28.80 support (neckline)
Stop Loss Above $34.25 (Top 2)
Target $22.47
Risk/Reward ~1:2 or better
Timeframe Weekly (Swing Trade)
Bias Bearish
🧠 Concluding Notes
This chart provides a high-probability bearish setup rooted in classical charting principles. The Double Top is one of the most reliable reversal patterns, especially when:
Formed after a prolonged uptrend (as seen here),
Confirmed with a trendline break,
Followed by strong bearish momentum toward the neckline.
Traders should monitor the support zone around $28.80 closely for a potential breakdown. If confirmed, the target near $22.47 becomes a realistic medium-term objective.
The chart displays a classic Double Top pattern, a bearish reversal structure typically found at the end of an uptrend. This pattern forms when price reaches a resistance level twice, fails to break above it both times, and eventually breaks the neckline/support level, confirming a shift in market sentiment.
🔍 Key Components of the Chart:
1. Resistance Level (Tops) – ~$34.25
The market formed two significant peaks around the same level — labeled Top 1 and Top 2.
This level has proven strong resistance, as price was rejected both times after testing this zone.
This zone is marked with a light orange rectangle and a horizontal blue line labeled "Resistance Level".
2. Support Level (Neckline) – ~$28.80
This level served as the neckline of the Double Top.
After the second top, the price sharply declined and is currently approaching this key support zone, highlighted again in light orange.
A clean break and close below this zone on the weekly timeframe will be a strong confirmation of the bearish reversal.
3. Trendline Break – Bearish Shift in Momentum
A rising black dashed trendline supported the prior uptrend.
Price action has now broken below this trendline with strong bearish momentum, indicating that buyers have lost control.
This trendline break adds confluence to the bearish setup, supporting the validity of the pattern.
4. Bearish Projection Target – ~$22.47
The target is projected using the height of the Double Top pattern.
Measured from the resistance level ($34.25) to the support ($28.80), the vertical distance is ~5.45 USD.
Subtracting this from the neckline gives us a projected target:
28.80 - 5.45 = ~23.35 (rounded down to ~22.47 for technical cluster support).
This target area is marked with a blue arrow and labeled "Target" near the horizontal support at $22.47.
5. Stop Loss – ~$34.25
The logical invalidation point is placed just above the resistance zone and the second top.
A move above this level would invalidate the double top pattern, signaling that bulls have regained control.
📈 Price Action and Candlestick Behavior
The strong bearish weekly candle that broke below the trendline shows a decisive shift in sentiment.
The candle's large body and long range confirm institutional selling interest.
Volume (if shown) would likely support the move, but even price structure alone is highly telling here.
🎯 Trading Strategy & Setup
Component Details
Entry On a confirmed break and retest of $28.80 support (neckline)
Stop Loss Above $34.25 (Top 2)
Target $22.47
Risk/Reward ~1:2 or better
Timeframe Weekly (Swing Trade)
Bias Bearish
🧠 Concluding Notes
This chart provides a high-probability bearish setup rooted in classical charting principles. The Double Top is one of the most reliable reversal patterns, especially when:
Formed after a prolonged uptrend (as seen here),
Confirmed with a trendline break,
Followed by strong bearish momentum toward the neckline.
Traders should monitor the support zone around $28.80 closely for a potential breakdown. If confirmed, the target near $22.47 becomes a realistic medium-term objective.
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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.