Bear Trap
False breakdown below support luring short positions before reversal.
A bear trap is a situation where price briefly breaks below a key support level, luring short positions, then sharply reverses upward — "trapping" short positions in a loss.
How it unfolds: 1. Price approaches important support level 2. Briefly broken below → technical short traders open shorts 3. Price quickly returns above support 4. Short positions in loss → forced buyback 5. Buying to cover shorts accelerates rise
Who sets bear traps:
•Market makers and whales with large long positions
•Algorithms that "see" where stop-loss orders are
•Natural market dynamics (no conspiracy)
How to recognize and avoid:
•Breakout on low volume = suspicious
•Candle that breaks but closes above support = bear trap
•Wait for candle close outside support before entering short
•Bull trap: opposite — false breakout above resistance
Examples:
•BTC "breaks" $29,000 support, goes to $28,500, returns to $32,000+
•Stop-loss sweep — bots see where stop-loss orders are and briefly go there