Your hair will not all fall out. Most likely, you have alopecia areata. This is a common condition in which a bald spot suddenly appears, lasts a few months, then grows back. Cause is unknown.
Chances are the itching and scratching have nothing to do with it. You can scratch put a few hairs, but they always grow back.
Itching can come from mild dandruff. Right now most of your itching no doubt comes from worrying that you're going bald, which you're not.
Get some over-the-counter dandryuff shampoo (tar, zinc), and see a dermatologist who can diagnose, treat, and reassure you.
Take care.
Dr. Rockoff
I have had a red rash on one side of my head only for about a month, It looks it a patch, and it flakes. It seems very similiar to your problem...