Dead Cat Bounce
A brief recovery within a larger decline that fails and resumes falling — a temporary bounce, not a bottom.
A dead cat bounce is a short-lived rally during a sustained downtrend that raises false hope of recovery before price rolls over and continues lower. The grim name captures the idea that “even a dead cat bounces if it falls far enough” — the bounce is mechanical, not a genuine reversal.
Such bounces are driven by short covering, bargain-hunting and relief, and they’re a frequent feature of bear markets — often functioning as bull traps. Distinguishing a dead cat bounce from a real bottom is genuinely hard in the moment; it’s usually only labeled in hindsight, once the bounce has clearly failed. Skepticism toward sharp counter-trend rallies is the practical takeaway.