A bull trap is a false market signal that can mislead investors into thinking that an asset's price will continue to rise. In a bull trap, the price temporarily moves above a resistance level or a previous high, convincing traders that a breakout has occurred. However, the price soon reverses direction and declines, trapping those who bought in during the false breakout. This can result in losses for investors who were caught by the trap. Bull traps often occur in bear markets or during periods of market volatility.