🔴🔴A bear trap is a market situation where the price of an asset (such as a stock or cryptocurrency) temporarily drops, making it appear that a downtrend is underway. This “trap” can entice traders to sell or short the asset, expecting further declines. However, the price then reverses and rises again, “trapping” those who sold or shorted, forcing them to cover at a higher price.
Bear traps are often created by large traders or institutions to manipulate the market by creating temporary dips to trigger selling before reversing direction. It is essential for traders to recognize the signs of a bear trap to avoid selling prematurely and potentially incurring losses
