Ask Leo : what is a bull trap in cryptocurrency ?

over 2 years ago

With the current situation in the Crypto market, many investors are carefully watching and observing the market so that they won't fall a victim of the bull trap ,

What is a bull trap

A bull trap is a situation where by a false signal of cryptocurrency or financial asset that is in bearish condition is showing a sign of recovering from the bearish condition which may not be true and can actually decline further and dip the more .
In this situation, a lots of investors would lose their saved investment thinking it is already a bull market and not knowing its going to dip the more. Many of them are in hurry to sell and make more profit but in the process the crypto declined further .
In the bull trap the price of a particular crypto will improve from its previous price and move a bit higher. This situation will entice the investors to buy more meanwhile its a false signal after a short period it will go down the more, in this situation the investors that are not patience enough will be willing to sell in hurry and they will get trapped in the market because of the fake signal

How can the bull trap be avoided ?

Bull trap can be avoided by taking your time to observe the market don't be in a haste to decide,investors can also involve in a low trade and not all the investment will be traded . with this technique the loss will be limit and one can escape the bull trap ,in other not to fall victim of the bull trap investors has to be observant put into consideration other signals ,make confirmatiom and be sure of the next step to take so that you won't loose your asset or crypto to the bull trap.

in conclusion could this present brake trough in cryptcurrency be a bull trap

One need to be smarter about this situation is take your time to check all signals don't be in a rush always remember that crypto market are volatile in nature and it is always better to have a low ng term investment structure