The bearish head and shoulders pattern in crypto is a classic technical analysis signal that suggests a potential trend reversal from bullish to bearish. Here's how it works:
Structure of the Pattern.
Left Shoulder: Price rises, then dips.
Head: Price rises higher than the left shoulder, then dips again.
Right Shoulder: Price rises again, but not as high as the head, then dips.
Neckline: A support level connecting the lows after the left shoulder and head. When price breaks below this line, it confirms the bearish signal.
The bullish head and shoulders pattern—more accurately called the inverse head and shoulders—is a powerful signal that a downtrend may be reversing into an uptrend. It’s the mirror image of the bearish version and is closely watched by crypto traders for potential buying opportunities.
Structure of the Inverse Pattern
Left Shoulder: Price dips, then rises slightly.
Head: Price dips lower than the left shoulder, then rebounds.
Right Shoulder: Price dips again, but not as low as the head, then rises.
Neckline: A resistance level connecting the highs after the left shoulder and head. A breakout above this line confirms the bullish reversal.
Structure of the Pattern.
Left Shoulder: Price rises, then dips.
Head: Price rises higher than the left shoulder, then dips again.
Right Shoulder: Price rises again, but not as high as the head, then dips.
Neckline: A support level connecting the lows after the left shoulder and head. When price breaks below this line, it confirms the bearish signal.
The bullish head and shoulders pattern—more accurately called the inverse head and shoulders—is a powerful signal that a downtrend may be reversing into an uptrend. It’s the mirror image of the bearish version and is closely watched by crypto traders for potential buying opportunities.
Structure of the Inverse Pattern
Left Shoulder: Price dips, then rises slightly.
Head: Price dips lower than the left shoulder, then rebounds.
Right Shoulder: Price dips again, but not as low as the head, then rises.
Neckline: A resistance level connecting the highs after the left shoulder and head. A breakout above this line confirms the bullish reversal.
Note
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.