The correct phrase to complete the sentence is:
The best way to complete this sentence is to mention that the old prison sat atop the hill and it loomed over the town from that point.
For something to loom over a space, it must be positioned at some distance from that point. This is the image that comes to mind when we visualize the old prison sitting atop a hill and looming over a town from that distance.
So, the option that best completes this sentence is the second option.
Learn more about prepositions here:
https://brainly.com/question/17476214
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