What Is a Short Squeeze in Crypto and Why Can It Make Prices Rise So Fast?
A crypto asset can jump several per cent in a matter of minutes, and the obvious explanation is often that buyers have suddenly become more confident. But sometimes the buyers are there for a less voluntary reason: traders betting on a fall are being forced to buy back their positions.That is the basic mechanism behind a short squeeze. In crypto, where leveraged futures and perpetual contracts can create large positions with relatively little collateral, a modest move higher can trigger a chain