What is a Crypto Bear Trap?

A bear trap is a situation in which the price of a cryptocurrency falls sharply, causing traders who have taken a short position (betting that the price will fall) to start losing money. This can cause some of these traders to close their short positions and buy back the cryptocurrency, pushing the price back up. For example, let's say that the price of Bitcoin has been steadily falling for the past few days. Some traders take a short position, betting…