A bear trap in crypto (and in traditional markets) is a false signal that makes traders think the price of an asset is going to drop, but instead it quickly reverses and moves upward.
Here’s the breakdown:
📉 What happens: The price of a coin suddenly breaks down below a key support level. This looks like the start of a bearish trend.
🐻 Traders’ reaction: Many traders sell or open short positions (betting the price will go down further).
🔄 The trap: Instead of continuing to fall, the price reverses sharply upward.
💥 Result: Bears (sellers/short traders) get “trapped” because they either sell too early or lose money as the market moves against them.
👉 Example: If Bitcoin is trading at $60,000 and falls quickly to $58,500 (breaking support), traders may think it’s going to $55,000. But suddenly, BTC bounces back above $60,000. Those who shorted are forced to exit at a loss.@MrRUHUL @CZ
