What is a bear trap!?

In trading some assets, including cryptocurrency, bears are called sellers who are short sellers. The concept is purely conditional, since any trader will situationally both sell and buy. A bear trap is a pattern on a price chart that occurs after a downward movement. The meaning of the figure is that when a local minimum is reached, the minimum breaks through. At this point, the bears receive a sell signal. However, this is just a fiction. The price turns around and immediately begins to rise.

Typically, the formation of a bear trap is accompanied by the achievement of a strong support level. After it can be reached and broken down, a sell signal appears. However, this is a trap. After some time, the price returns to the support level, which has now become resistance, breaks through it from the bottom up and begins to grow.

For example, in January 2023, Bitcoin was growing steadily. In the first days of February, BTC corrected to the area of ​​$21,350-$21,450. Thus, a resistance level was formed. After this, BTC began to grow again, exceeding $25,000 on the 20th of February. Next came a correction.