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What are the key indicators to look for when identifying an inverse head and shoulders pattern in the cryptocurrency market?

avatarCarstens MendozaDec 26, 2021 · 3 years ago1 answers

When analyzing the cryptocurrency market, what are the main indicators to consider in order to identify an inverse head and shoulders pattern?

What are the key indicators to look for when identifying an inverse head and shoulders pattern in the cryptocurrency market?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    When it comes to identifying an inverse head and shoulders pattern in the cryptocurrency market, one key indicator to look for is the volume during the formation of the pattern. Higher volume during the formation of the head and shoulders can suggest increased buying or selling pressure, providing confirmation of the pattern. Traders also pay attention to the neckline, which acts as a resistance level that needs to be broken for the pattern to be confirmed. Additionally, the height of the shoulders and the head should be roughly equal, with the head being lower. It's important to note that the inverse head and shoulders pattern is considered a bullish reversal pattern, indicating a potential trend reversal from a downtrend to an uptrend.