📉 What Is a Dead Cat Bounce in Crypto?
A dead cat bounce is a temporary price bounce that happens after a strong crash — followed by continued downside.
The bounce creates false hope, making it look like the market has recovered, when the larger downtrend is still intact.
🔄 Why Dead Cat Bounces Happen
They usually occur because:
Short sellers take quick profits
Dip buyers attempt early entries
Oversold conditions cause a brief rebound
But there’s no real demand behind the move.
⚠️ Why Traders Get Trapped
Dead cat bounces often :
Lure buyers too early
Fail near resistance levels
Resume the downtrend quickly
Many mistake them for the start of a new bull run.
🧠 Key Takeaway
Not every bounce is a reversal.
In bear markets, patience and confirmation matter more than optimism.
