Fakeout
A fakeout (false signal) is a technical analysis situation in which the price of a crypto-asset appears to break a key level — for example, an area of support or resistance — producing an apparent breakout, only to reverse quickly and negate the move.
The phenomenon does not concern only crypto-assets but any financial market, including forex. Depending on the direction of the false signal, it is called a Bull Trap for a false bullish signal or a Bear Trap for a false bearish signal.
To reduce the risk of misreading a fakeout, tools such as volume analysis and moving averages are used. They remain interpretations that are prone to error: no signal guarantees future price movements.
Disclaimer: This entry is for information purposes only and does not constitute investment advice or a recommendation.