Lesson 20: What Is a Short Squeeze vs Long Squeeze? 🧨📈📉
Ever seen price explode 🚀 or crash 💣 in seconds — with no news?
Chances are, it was a short squeeze or long squeeze. Let’s break down both 👇
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🔵 What Is a Short Squeeze?
A short squeeze happens when too many traders are shorting (betting price will drop), but price starts to go up instead 📈
As price rises, shorts are forced to close their trades, which means they start buying → pushing price even higher!
🔥 It creates a chain reaction of buying pressure.
Result: Fast, violent price pump 🚀
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🔴 What Is a Long Squeeze?
A long squeeze is the opposite. Too many people are long (expecting price to rise), but price drops sharply 📉
Long traders panic and close their positions, which adds more selling pressure → price crashes even harder!
Result: Brutal dump 💣
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How to Spot Them? 👀
1. High open interest + one-sided funding rates (too many longs or shorts)
2. Sudden high volume spike in the opposite direction
3. Price breaks key support/resistance violently
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Pro Tip 🧠
Don’t chase after big green/red candles. These squeezes punish late entries.
Watch the market build up pressure, then trade the aftershock once things calm down.
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Next lesson: Lesson 21 — How to Use Liquidation Maps & Heatmaps 📊🧯
