Bull Trap

A bull trap is a technical analysis situation in which the price of a crypto-asset appears to start an upward move, typical of a Bull Market, but quickly reverses and falls back. The bullish signal therefore turns out to be false.

Anyone who interpreted the move as the beginning of a growth phase, perhaps driven by FOMO, is left in an unfavourable position when the price falls again. It is the opposite of a Bear Trap, where a false bearish signal reverses.

Bull traps often occur around the apparent break of a resistance level that is not confirmed by trading volume or other indicators. 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. Young Platform does not offer leveraged trading or derivative products.

Correlated words

Indicator Parameters Golden Cross Pullback Average True Range (ATR)TCP/IP Financial Instrument Neural Networks Purchasing power Bonds

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