A short squeeze is a sudden massive increase in the price of an asset, fueled by liquidations of short traders. To short the market, a trader first borrows the asset and then sells it, with the intention of buying it back later at a cheaper price. Let’s say some really bad news came up for Bitcoin. Inexperienced people start selling out of panic, and a huge number of traders begin shorting the market. These two factors cause a dip in the price and gives confidence to OTHER short traders to begin shorting the market. This chain effect continues to reinforce itself. And in this case, the asset dumps almost unrealistically. The dip stabilizes when whales re-enter at a key price. A small purchase from them moves the market slightly upwards. The bottom is in. Traders who short the market at the absolute bottom with high leverage are now forced to buy back the asset or face liquidation. The asset starts to pump. The pump creates panic among other short traders. They proceed to buy back the asset, adding even more buying pressure. Repeat this process many more times, and that’s how a short squeeze occurs. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ *Opinions expressed within this video are for entertainment purposes only. We are not financial/legal advisors. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Watch our other shorts: https://www.youtube.com/watch?v=6rHanNkmG04 Be our patron and join our journey towards financial literacy: https://www.patreon.com/TheFuturizts Read our weekly newsletter: https://www.getrevue.co/profile/futuristsmy?via=twitter-profile Listen to our podcasts: https://open.spotify.com/show/6qAoiCR58281iIi4TUTl3P Be part of our community: https://discord.gg/jdKa226b8B Twitter and Instagram: @TheFuturizts Support our works: https://app.pentas.io/user/0x169aD1673c2Da319B9E43bD58fD35891EA67B398 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Sources: i) https://www.investopedia.com/terms/s/shortsqueeze.asp ii) https://www.fool.com/investing/how-to-invest/stocks/short-squeeze/