#DigitalAssetBill This is a common phenomenon in the derivatives market and it relates to "short squeeze".

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

1. Short squeeze – Forcing short sellers to buy back:

When there are too many short sellers, if the price goes up against them, they incur losses.

Many are liquidated or have to manually cut losses, forcing them to buy back to close their positions.

This mass buying pushes the price up quickly and strongly, creating a pump opposite to the initial expectation.

2. Market psychology is skewed:

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

Market makers or sharks will go against to hunt for liquidation and profit.

3. Strong support levels or unexpected news:

If the price hits a strong support level or there is unexpectedly good news, the buyers will counterattack, causing a squeeze.

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What to do when the market is at risk of a short squeeze?

Always set clear stop losses.

Do not go all-in or hold positions too deep without a plan.

Monitor the funding rate and the long/short ratio in the market to avoid falling into crowd traps.