Bull Trap
A false upside breakout that lures buyers in, then reverses and leaves them holding losses.
Price clears a resistance level and looks ready to run. Buyers chase the move, convinced a new leg up has started. Then it stalls and rolls over, dropping back below the breakout point and trapping everyone who bought the top.
Thin order books make crypto especially prone to these. A handful of large sells can fade a breakout fast. The bearish mirror is the bear trap. One way traders cut the risk is waiting for a clean candle close and a successful retest before committing.
Related terms
A false downside breakdown that tricks sellers into shorting, then snaps back up against them.
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.
Dead Cat BounceA short-lived rally inside a larger downtrend that fades fast and gives way to more selling.