🧠 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.
🧩 Pro Tip:
Pair this pattern with RSI, volume spikes, or MACD crossovers for stronger confirmation.
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