#MarketRebound #Short Squeeze?

A short squeeze occurs when many traders open short positions (sell) with the expectation that prices will fall. However, if prices start to rise quickly and strongly, short sellers will be forced to close their positions (buy to close) to avoid significant losses.

The closing of these short positions adds buying pressure, which accelerates the price increase. This is what is referred to as a squeeze — short sellers are "squeezed" by the unexpected price rise.

What is the relationship with Liquidation?

Liquidation occurs when traders with high leverage do not have enough margin to maintain their positions as the market moves against them.

If there are many high-leverage short positions with liquidations above the current price (for example, BTC at $92,000), then if the price starts to rise towards that level, liquidations will forcibly buy the asset.

This creates automatic mass buying → pushing prices even higher → domino effect → short squeeze.

And I have lost nearly $1000 because I took a short position at #MarketRebound yesterday.