common-close-0
BYDFi
Trade wherever you are!

What are some key indicators to look for when identifying a head and shoulder pattern in the cryptocurrency market?

avatarOlivetree MarketingDec 26, 2021 · 3 years ago1 answers

Can you provide some key indicators that can help identify a head and shoulder pattern in the cryptocurrency market? What should I look for?

What are some key indicators to look for when identifying a head and shoulder pattern in the cryptocurrency market?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    When it comes to identifying a head and shoulder pattern in the cryptocurrency market, there are a few key indicators to consider. Firstly, pay attention to the shape of the pattern. The left shoulder, head, and right shoulder should resemble a human head and shoulders, hence the name. Secondly, analyze the volume during the formation of the pattern. Typically, the volume is higher during the left shoulder and the right shoulder, while it is lower during the head. Thirdly, look for a break below the neckline, which is formed by connecting the lows of the two shoulders. This break confirms the pattern and signals a potential downward trend. Remember, it's important to use other technical indicators and conduct thorough analysis before making any trading decisions based on this pattern.