Recently, I saw someone asking about the top escape strategy, so I decided to organize my understanding of the M-head pattern. This pattern is actually quite common in the crypto world; many people have experienced it but didn't recognize it.

In simple terms, an M-head is when the price continuously rises to a certain level, trading volume suddenly surges, and then the price starts to turn around. After falling to a low point, the price rebounds again, but this time the rebound volume is noticeably weaker than the first. Finally, the price drops again, breaking below the initial low point of the first decline. The overall movement looks like the letter "M," hence the name M-head pattern.

I’ve observed many examples myself, and the M-head has several particularly obvious features. First, it forms two peaks, called the left peak and the right peak. Theoretically, these two highs should be roughly the same, but in actual movement, the left peak is usually slightly lower than the right peak, with a difference of about 3% being normal.

The second point to note is the neckline. When the price falls back from the first peak, the low point at that time forms the neckline. Once the price rises again and then falls back, breaking below this line, the M-head pattern is officially confirmed. This moment is critical because it often indicates that a larger downward move is about to happen.

Another detail is trading volume. During the formation of the M-head, the volume at the left peak is the highest, followed by the right peak, with a clear decreasing trend. What does this indicate? It shows that during the second rebound, the buying momentum is weakening, signaling that the upward trend is nearing its end.

Regarding trading strategies, many people are most concerned about how to find the best selling point. The first selling point is at the right peak of the M-head, where most investors tend to sell. Being able to sell at this position can be considered as having "foresight."

But I think a more reliable point is the second selling point, which is at the neckline. When the price breaks below the neckline, it basically signals that a significant downward trend is about to begin. At this point, clearing all your holdings is the most prudent move. Sometimes, the price may rebound again, but the strength is usually weak, and the neckline acts as a strong resistance. So, don’t expect the rebound to bring the price back up.

Actually, the M-head pattern, as a reversal formation, appears quite frequently in the crypto market. Watching more real-time charts will help you develop a conditioned reflex. Next time you encounter this kind of movement, you'll have a clear idea of what’s happening.