What is Bear Trap?

A bear trap is a form of market manipulation that can be carried out by wealthy investors working together to manipulate the price of an asset. By arranging to sell a large amount of an asset, like a cryptocurrency, at roughly the same time, a significant price drop occurs. This is intended to persuade other market participants to sell the same asset, resulting in a further price decline. Shortly afterwards, the initial sellers buy back in at a lower price, boosting the price upwards, only to then potentially sell the asset once again for more profit.