🧠 Head & Shoulders Pattern — Bearish Reversal You Shouldn’t Ignore

The Head and Shoulders is one of the most reliable bearish reversal patterns in crypto (and all markets).


It signals a potential trend shift from bullish to bearish. Here's how to spot it:



🔍 Pattern Breakdown:

Left Shoulder

📈 Price rises, then pulls back — forming the first peak.


Head

🚀 A higher peak forms — the strongest rally — followed by another drop.


Right Shoulder

📉 A weaker rally that fails to beat the head — forming the third peak.


Neckline

A horizontal or slightly sloped line connecting the lows between the shoulders and head.



Breakdown Confirmation

✅ Pattern is confirmed when price decisively breaks below the neckline.



📉 Trading Implications:

Bearish Signal:

Indicates trend reversal and possible start of a downtrend.


Entry Point:

Consider entering a short position on neckline breakdown.


Stop Loss:

Place stop-loss just above the neckline to manage risk.


Profit Target:

Measure the height from head to neckline. Project that downward from the breakout point.



đŸ§© Pro Tip:

Pair this pattern with RSI, volume spikes, or MACD crossovers for stronger confirmation.



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