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Definition

Manipulation of a financial instrument like crypto, stock or commodity by investors. Traders who “set” the bear trap do so by selling the crypto asset until it fools other investors into thinking its upward trend in value has stopped, or is dropping.

Those who fall into the bear trap will often sell at that time, fearing a further drop in value. At that point, the investors who set the trap will buy at the low price and will release the trap—which is essentially a false bear market. Once the bear trap is released, the value will even out, or even climb.