Bear Trap
It is a deceptive market pattern that suggests a strong downward movement is beginning, prompting traders to sell or open short positions, but the market quickly rebounds upward.
How does it happen?
- A temporary break of an important support
- Entry of selling liquidity
- Then suddenly the price rebounds and starts to rise
Thus, those who entered a sell position at the bottom (bears) are caught in the "bear trap."
Understanding this trap helps you avoid hasty decisions and become more aware of deceptive scenarios.
Advice:
Do not rely solely on the break; pay attention to the overall context and momentum.
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