What Is Double Top?
A double top is a bearish reversal pattern that forms when price reaches the same resistance level twice and fails to break through, creating an "M" shape. The pattern signals that buyers tried twice to push through resistance and failed, indicating buying pressure is exhausted and a decline is likely.
How Double Top Works
The neckline is the low between the two peaks. The pattern confirms when price breaks below the neckline. The measured move target is the distance from the peaks to the neckline, projected downward from the breakdown point. The second top with declining volume and/or bearish RSI divergence strengthens the signal.
Why It Matters for Traders
Double tops in crypto often form at psychologically significant round numbers and previous all-time highs. The failed second attempt to break resistance creates a wave of disappointed longs who become sellers, driving the reversal. Double tops with high funding rates and extreme bullish sentiment on the second peak are among the highest-probability shorting setups.
