According to Medline, babies' heads often compress on their way out of the vagina, since their skulls are so soft. So, when they're born, their heads may look less like circles and more like ovals. WebMD calls this phenomenon "quite normal," and What To Expect says it's especially common when the baby takes a long time getting out of the birth canal. Fluid and blood might build up in and below the scalp, but this usually goes away in a matter of days, and the baby's fine.