Bear Trap
A bear trap is a technical analysis situation in which the price of a crypto-asset appears to start a downward move, typical of a Bear Market, but then quickly reverses and turns back up. The bearish signal therefore turns out to be false.
The phenomenon concerns financial markets in general, including crypto-assets and traditional instruments. It is the opposite of a Bull Trap, where a false bullish signal reverses.
Bear traps are linked to the dynamics of supply and demand and are studied with technical analysis, for example, by observing trading volume. They remain interpretations that are prone to error: no pattern guarantees future price movements.
Disclaimer: this entry is for information purposes only and does not constitute investment advice or a recommendation.