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Definition

A bull trap is set by investors in a financial instrument, like crypto, stock or a commodity, who will buy large amounts in order to artificially drive the value upward, or create a false bull market.

Traders who are fooled by the bull trap will often buy shares at the inflated price, in the belief that the upward trend will continue and the shares they’re buying will rise in value.

Unfortunately, those who fell into the bull trap will often be left holding shares for which they paid too much, since once the trap is released, the market evens out, and sometimes even drops.