What is a bull trap in the crypto world?

Very unstable crypto price movements often lead to a lot of speculation, a green market is not necessarily a good sign and a red market is not necessarily a bad sign. Because of this, the terms bear trap and bull trap emerged in crypto.

A bull trap is a false signal that refers to a downward trend in a stock, index, or even crypto. The signals given in bull traps generally show signs of recovery or reversal after a downtrend to go back up, but in reality the asset is actually moving to further decline.

In a bull trap the price of the asset will exceed the previous support level, therefore traders who are not aware of this trap will think that the price will go up and buy more assets, when in fact the opposite is true. Therefore the bull trap can provide big losses for traders who take the wrong step.

The bull trap pattern begins with the asset price breaking through resistance and appears to be in an uptrend which will trigger traders to enter the market. Then there is a sudden reversal, and this causes the trader to lose because the price actually drops and this is called a bull trap.

And that's a little explanation about the bull trap, hopefully by knowing the bull trap pattern traders can avoid the pattern.

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