Why is the pancake rising while everyone is shorting? This is an interesting and common market phenomenon: the price of BTC (Bitcoin) is rising, but there are generally a large number of short positions in the market. The reasons for this "counter-trend shorting" may include the following aspects:

1. Investor expectation of a pullback

Many people believe that the current rise is an "overbought" or "false rise," expecting an imminent technical pullback. Therefore, during the rise, they "short on the highs," hoping to profit when prices fall.

2. Institutional vs. retail investor games

Many retail investors chase after the rise when they see it going up, but some institutional investors short in the opposite direction, using retail sentiment to build short positions, thus creating a "short squeeze" to make money.

3. Funding Rate mechanism

In the cryptocurrency contract trading, the funding rate is a key indicator:

If most people are long, the long side has to pay interest to the short side.

If most people are short, the short side has to pay interest to the long side.

Experienced traders will take advantage of this mechanism to arbitrage: when the entire market is shorting, going long can continuously earn interest, so they go against the trend.

4. Short hedging or locking operations

Some funds are held by investors who own BTC in the spot market; they short futures/contracts to hedge risks—this behavior does not imply a bearish view on the market but is a risk management strategy.

5. Short squeeze is happening

If many people are shorting while BTC rises, it may trigger mass liquidations, further pushing up the price, which forms the so-called "short squeeze." The rise may actually exacerbate the short liquidations.

Summary

The fact that many people are shorting does not necessarily mean that the price will fall; rather, it may push up the price due to excessive shorting being "squeezed out." The trading behavior in the short-term market is often a game of emotions and strategies, rather than a simple correlation of rise = bullish and fall = bearish.