A Bull Trap is a false market signal in which the price of an asset initially shows signs of a strong upward trend, leading investors to believe that the asset will continue to rise in value. However, after these investors buy into the asset, the price reverses and starts to decline. Those who bought in, expecting further price increases, are now “trapped” in a losing position. Essentially, it’s a situation where bullish investors are misled into thinking the upward trend will continue, only to be caught off guard by a subsequent price decline.
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