What Is a Bull Trap? Understanding This Common Trading Pitfall
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A bull trap is a misleading indicator that leads to a market uptrend. They are common in crypto. Educating yourself is an important part of avoiding bull traps.
A bull trap is the opposite of a bear trap. While a bear trap misleads investors into thinking the market is declining only for it to reverse upward, a bull trap tricks traders into believing the market is rising when, in reality, it’s poised for a downturn. Both are psychological pitfalls that prey on investor emotions like fear and greed, often resulting in losses for those who act hastily.
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