Short Squeeze
A rapid price surge that forces shorts to buy back, fueling an even sharper spike — reflexive upside violence.
A short squeeze happens when a rising price forces short sellers to close by buying back the asset — and that buying pushes the price higher still, triggering more short liquidations in a self-reinforcing spiral. The more crowded and leveraged the shorts, the more violent the squeeze.
Crypto’s high leverage makes squeezes spectacular — visible beforehand as heavily negative funding and rising short open interest, then as a near-vertical green candle when it fires. It’s the upside mirror of a long-liquidation cascade. Traders watch positioning data precisely to avoid being the fuel for the next one.