A bear trap in crypto refers to a situation where traders are misled into believing that a cryptocurrency’s price will continue to fall, only for it to reverse direction and rise instead. Here's how it typically unfolds:
1️⃣ Large players, often called whales 🐋, or coordinated groups of traders deliberately push the price down sharply, creating the illusion of a strong downtrend.
2️⃣ This sudden drop scares other traders, prompting them to sell their holdings out of fear that the price will decline even further.
3️⃣ Once enough traders have sold, these big players swoop in and buy back the crypto at the lower price, driving the price back up 🚀.
In essence, a bear trap tricks sellers into offloading their assets prematurely, only to see the price rebound afterward. It’s a common tactic used to manipulate the market for profit.
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