#Bitcoin Head & Shoulders Overview
The Head & Shoulders Pattern signifies a change of trend from Bullish to Bearish.
The Left Shoulder is the initial push by speculators. The Head is the major push by speculators.
The Right Shoulder shows us the speculators have now failed to push the price higher then the Left Shoulder once more, a sign of weakness.
Confirmation is followed by a breakdown of the Trendline which can occur Diagonally or Horizontally.
There is no guarantee the price will break down from the trendline if it does visit that area, the breakouts success is usually dependent on other factors outside of the price directly, so manage your risk.
Unless the buyers get the price back above the previous shoulder resistance area, we can assume that lower prices (at least the trendline of the Head & Shoulders) are likely.
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When trading patterns it is best to keep it simple...
Keep your eye on the prize and keep your price chart simple to keep your mind clear from distractions, understanding the reaction of price within the pattern structure itself.
Notice how the pattern looks "Ugly" and "Not Right" on the Daily chart (Bottom Example) but on the Weekly (Top Example) the pattern does look quite normal, which is worrying for #BTC right now.
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How do we know we are completely wrong?
We will know the sellers have failed (at least in the short term) if the buyers succeed in getting the price above the previous Support Area (marked in Transparent Blue, below image).
Thanks for reading! Refer to my profile and other information linked below for further educational content.
The Left Shoulder is the initial push by speculators. The Head is the major push by speculators.
The Right Shoulder shows us the speculators have now failed to push the price higher then the Left Shoulder once more, a sign of weakness.
Confirmation is followed by a breakdown of the Trendline which can occur Diagonally or Horizontally.
There is no guarantee the price will break down from the trendline if it does visit that area, the breakouts success is usually dependent on other factors outside of the price directly, so manage your risk.
Unless the buyers get the price back above the previous shoulder resistance area, we can assume that lower prices (at least the trendline of the Head & Shoulders) are likely.
----------------------------------------------------------------------------------------
When trading patterns it is best to keep it simple...
Keep your eye on the prize and keep your price chart simple to keep your mind clear from distractions, understanding the reaction of price within the pattern structure itself.
Notice how the pattern looks "Ugly" and "Not Right" on the Daily chart (Bottom Example) but on the Weekly (Top Example) the pattern does look quite normal, which is worrying for #BTC right now.
----------------------------------------------------------------------------------------
How do we know we are completely wrong?
We will know the sellers have failed (at least in the short term) if the buyers succeed in getting the price above the previous Support Area (marked in Transparent Blue, below image).
Thanks for reading! Refer to my profile and other information linked below for further educational content.
