How "Head and Shoulders" Helps Crypto Traders Catch Reversals

The “Head and Shoulders” pattern is one of the most reliable trend reversal signals in the crypto market. It looks simple: three peaks, where the middle (head) is higher than the two outer (shoulders).

How it works:

A bearish version is formed when the price hits three consecutive highs, with the middle one being the highest. When the price breaks the “neckline” (horizontal support between the shoulders), it signals a drop.

Specific example: If the distance from the neck line to the head = $10, then the potential drop target will also be $10 below.

Practical tips:

• Wait for confirmation on multiple timeframes
• Always place the stop-loss above the neckline
• Don't jump into every model - wait for the best opportunities
• Combine with other indicators (not a 100% accurate pattern)

The pattern works, but it is not a holy grail. Combine it with good money management — and the chances of profit will increase.