🐻𝐖𝐡𝐚𝐭 𝐢𝐬 𝐚 𝐛𝐞𝐚𝐭 𝐭𝐫𝐚𝐩 𝐚𝐧𝐝 𝐡𝐨𝐰 𝐝𝐨𝐞𝐬 𝐢𝐭 𝐰𝐨𝐫𝐤?🐻

A bear trap refers to a market scenario where the price of an asset, such as a stock or cryptocurrency, temporarily declines, suggesting a downtrend is in motion. This can entice traders to sell or short the asset in anticipation of further drops. However, the price soon rebounds, catching those who sold or shorted off guard and forcing them to buy back at a higher price.

Bear traps are often orchestrated by large traders or institutions to manipulate the market, creating short-lived dips to trigger selling before reversing direction. It’s crucial for traders to identify the signs of a bear trap to avoid premature selling and potential losses.