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Bull Trap? The Trap that Ruins You without Warning

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It has happened to you: you see that an altcoin rises 50% in hours, everyone on Twitter is shouting “LFG”, you get the urge of FOMO and invest money. The next day… total crash. That, buddy, is a classic bull trap.

What Really Happens

A bull trap is when the market pretends to be bullish but is actually a trap. The price rises ( sometimes due to fake news, sometimes because whales are moving money), attracting more buyers, then the creators bail out by selling everything, and you are left with the bags.

It is the opposite of a bear trap ( where it goes down and then up ). Both play with your emotions: fear and greed.

Why They Occur

Fake news: Someone posts “Such government adopts Bitcoin as legal tender” (fake), the price skyrockets, people rush in, then it turns out to be a lie → free fall.

Rug pulls: The project was a scam from the start. Once it reaches a certain price, the devs sell EVERYTHING and disappear.

Unrestrained FOMO: Everyone buys, the early ones win, the latecomers lose. That's how it is.

Deceptive timing: A 3-day increase does not mean it is real. It may take weeks to collapse.

Warning Signals

Before putting in money, check this:

  • Price spikes without clear reason
  • Trading volume that does not match the rise (few traders moving the price)
  • Sell order mountain appearing
  • The price does not easily break resistances.

All of this points to a small group moving the game, not the entire market.

How to Protect Yourself

1. Automatic stop-loss: If you buy at $8,000 but are not sure, set a stop at $7,950. You lose $50 at most, not the entire wallet.

2. Extreme patience: FOMO is your number one enemy. If you miss an opportunity = you live another day. If you panic = you lose money.

3. Research like a stalker: Read daily news, check the project's Discord/Twitter. If something smells fishy, don't enter.

If You've Already Fallen

First: don't sell in panic if the fundamentals are still strong. Second: analyze what you did wrong. Third: never trade out of revenge ( trying to recover losses quickly almost always fails ). Emotional discipline is what saves you.

Remember: even Satoshi lost money in altcoins. The difference between a successful trader and a ruined one is how they handle the L's.

BTC-3.4%
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This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
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