Bull Trap

The best way to define a bull trap is just the reversal against a bullish trend. A bull trap generally occurs when traders and investors buy securities based on resistance breaking. The bull trap is intended for traders and investors to catch off guard, as a result, they exit positions without any choice.

Bull traps give off false market signals, often exhibiting a prominent downward trend. This is why bull traps are often referred to as the 'whipsaw pattern.' Once the trap is properly laid, it entices traders and even long-term traders to make positions for more purchases.

Bull traps are often notorious for giving off sharp reversals after finishing a breakout. In the crypto space, since breakouts are always followed by stronger price action, traders are often intimidated by it.