Market Traps: How Not to Lose Your Money in Cryptocurrencies

The crypto market is like a high-stakes poker game. The gainers know how to read the game; the losers only see green and red numbers.

The Most Dangerous Trap: When Everyone Believes the Same Thing

Imagine this: Bitcoin falls 15% in a week. Panic takes over. Investors desperately cut losses. Then, without warning, the price rises 20% in two days. Those who sold in panic lost a guaranteed gainer.

This is called Bear Trap (bear trap): a false price drop within an uptrend. Big players create these illusions by optically manipulating orders and spreading negative news. Their goal: to buy cheaply what small investors panic-sell.

The opposite phenomenon is the Bull Trap (bull trap). The price breaks historical resistances. Euphoria takes over. Everyone enters with FOMO. But demand quickly runs out and the price collapses, trapping those who bought at the peak.

Why These Traps Work

Bear Trap occurs because:

• Large whales create massive sell orders ( although they then cancel them )
• Negative news strategically coincides with technical declines
• Small investors sell out of fear, not logic

Bull Trap occurs because:

• The price momentum attracts fresh money without real fundamentals
• The trading volume is artificial (bots + coordination)
• Correction is inevitable when large players take profits

How to Identify Them Before Losing Money

Tool 1: Fibonacci If the price falls and only touches the 38.2% retracement level, it is likely to be a trap. True reversals reach 50% or more.

Tool 2: Technical Indicators MACD and RSI show divergences when prices lie. If the price rises but the indicators do not confirm, it is a red flag.

Tool 3: Trading Volume A breakout without volume is smoke. A true movement comes with confirmed volume 30-50% above the average.

4-Step Defensive Strategy

1. Do not buy on initial breakouts. Wait for confirmation for at least 2-3 candles. 70% of false breakouts are traps.

2. Set Stop Loss before entering. Never exceed 10% loss per trade. If you lose 3 trades in a row, exit the market for that day.

3. Analyze the psychology of the market. When EVERYONE is talking about the same coin, it's time to sell. When EVERYONE is selling, it's time to buy small positions.

4. Trust Price Action. The candle patterns (double top, head & shoulders) are more honest than any news.

The Inconvenient Truth

85% of new investors in crypto lose money in the first 6 months. Not due to a lack of luck, but due to a lack of discipline and patience. Traps exist because they work. The question is: will you be a victim or will you learn to dodge them?

Investing in cryptocurrencies is a marathon, not a sprint. Those who last are the ones who never bet money they can't afford to lose, and they never follow the herd.