A bear trap is a false technical indication of a market reversal from an uptrend to a downtrend. It occurs when the price of an asset appears to be breaking down through a key support level, causing traders to believe that a bearish trend is forming. In response, some traders sell off their assets, expecting further price declines.

However, after this initial drop, the price quickly rebounds, catching those who sold off guard. The market then resumes its uptrend, and the traders who sold in anticipation of a deeper decline realize they were "trapped" into making a premature decision. This phenomenon is often used by more experienced traders to shake out less experienced investors or to accumulate assets at a lower price.