A bull trap is a false signal, referring to a downward trend in a stock, index, or other security that reverses after a compelling rally and breakout of a previous support level.

A bull trap is a situation that occurs when an asset whose price continues to decline shows a reversal and upward trend but immediately resumes its downward trend. In a bull trap, the price of an asset surpasses a previous support level, attracting traders and investors who want to play the long term to buy more of the asset.

Bull traps are notoriously deceptive asset indicators, especially for traders who are inexperienced in the world of crypto. In fact, this is one of the reasons why traders should be wary of any sharp trend reversal in an asset's price once it begins to experience a breakout, which is a price movement below a support level.