$BTC This is a common phenomenon in the derivatives market and it is related to "short squeeze" (forcing short positions to close).

Why does the price increase when there are too many short positions?

1. Short squeeze – Forcing sell positions to buy back:

When there are too many short sellers, if the price rises against them, these individuals incur losses.

Many may be liquidated or forced to cut losses manually, forcing them to buy back to close their positions.

This collective buying drives the price up quickly and strongly, creating a pump against the initial expectation.

2. Market sentiment becomes skewed:

When "too many people are on one side", the market tends to go against the crowd.

Market makers or sharks will counteract to hunt for liquidations and profit.

3. Strong support zones or unexpected news:

If the price hits a strong support zone or there is unexpected good news, the buying side will counterattack, causing a squeeze.