A **bear trap** is a false signal that indicates the price of a cryptocurrency (or other financial asset) is going to decline, leading traders to believe that a downtrend is starting. As a result, many traders sell or short the asset, expecting to profit from a continued price drop. However, the market reverses direction and moves upward instead, "trapping" the traders who sold or shorted, often leading to losses as they scramble to close their positions at a higher price.

Bear traps are typically seen in technical analysis when a security's price breaks below a support level, only to quickly reverse and rise back above that level.