Double Top
A double top is a bearish reversal pattern where price hits a resistance level twice and fails to break through both times, forming two peaks at roughly the same height.
Understanding the Concept
When price can't break resistance after two serious attempts, that's a red flag. Bulls tried twice and failed. Confidence is breaking. Smart money starts exiting. The pattern becomes official when price breaks below the valley between the two peaks. That's your signal the trend's reversing. Double tops are everywhere in crypto because everyone's watching round numbers. BTC at $50k twice? That's a psychological ceiling. The bigger the timeframe, the more significant the pattern. A double top on the daily chart is way more important than one on the 15-minute.
Real-World Example
LINK pumps to $18.50, gets rejected, pulls back to $16, then rallies again to $18.60 and gets rejected again. When it breaks below $16 (the valley), you've got confirmation. Time to short or exit longs.
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