Bear Trap
A false downside breakdown that tricks sellers into shorting, then snaps back up against them.
Price slips below a support level and looks like it's breaking down. Bears short it and weak holders sell, expecting more downside. Instead price reverses, climbs back above support, and squeezes the late sellers as it rises.
These often run on stop-loss orders clustered just under support. Triggering them forces a wave of selling that quickly exhausts, then buyers step in. The bullish counterpart to a bull trap, a bear trap punishes traders who act the instant a level breaks rather than waiting for confirmation.
Related terms
A false upside breakout that lures buyers in, then reverses and leaves them holding losses.
BreakoutPrice pushing decisively through a level it had been stuck below or above, often on rising volume.
Support and ResistancePrice levels where buying or selling has repeatedly stalled a move, marking floors and ceilings on a chart.
Short PositionA bet that an asset's price will fall, made by selling borrowed coins to buy back cheaper.