Probably "not" directly.

Diabetes can cause some skin rashes - mainly caused from "either" too much sugar in your sweat which can result in yeast or fungal infections (feeding on that extra sugar) OR

rashes caused because years of high sugars have caused blood vessel damage so the (skin) which causes nerve damage resulting in rashes in the area of the damage.

Typically, hairline (or on a hair covered head) "scabs" is a form of psoriasis. Psoriasis is now believed to be an auto-immune disease but flare ups are triggered by inflammation in many cases.

Also, people with psoriasis are known to have significantly increased risk of developing diabetes (they believe common metabolic factors cause both).

So the opposite is probably true - if you have diabetes that may leave you at greater risk to develop psoriasis (I would guess).

I have had psoriasis outbreaks (usually just in the winter - so "right now") for most of my life. In my case it effects the backs of my hands and along the hairline over my ears with a few (eruptions) on the hairline at the back of my neck (sometimes).

What you are describing sounds exactly like what I experience, which was diagnosed as psoriasis many years back.