A "bull trap" is a false market signal that can deceive traders into believing a market trend is continuing upward when, in reality, it is about to reverse downward. It typically occurs during a bear market or a period of market consolidation. Traders may see a short-term rally or a break above a resistance level and assume a new bullish trend is forming. However, after buying in, the market reverses and moves lower, leading to potential losses for those who bought during the trap.

In the context of cryptocurrency, bull traps can happen during volatile periods when short-term price spikes give the illusion of a sustained upward trend. Identifying bull traps often involves looking for weak volume during rallies, sharp reversals, and overbought conditions on technical indicators.