Is the market staging a 'short squeeze trap'?
The current cryptocurrency market shows a strong sense of division: while prices continue to fluctuate near historical highs, technical indicators frequently signal bearish divergences. At the same time, most traders are eagerly waiting for shorting opportunities.
According to contract platform data, nearly 70% of positions are leaning towards the bearish direction. This kind of one-sided expectation is often when major funds like to make their move—when market sentiment reaches a consensus, a contrary action can easily 'squeeze the shorts'.
Therefore, it cannot be ruled out that the market will welcome a round of counter-trend breakout: Bitcoin suddenly surges above $110,000, and Ethereum seizes the opportunity to challenge the 3,000 mark, quickly breaking through the dense bearish defenses, forcing a large number of short sellers to stop-loss, which in turn pushes the market to continue soaring.
However, such market conditions often also hide 'killing opportunities'—once FOMO sentiment reaches a critical point, the market is very likely to suddenly experience a flash crash washout. This kind of 'upward surge and downward crash' volatility can sweep away retail investors chasing highs and also cleanse the long positions held at high levels.
In such a situation, the real trend often hides in the calm period after the emotional washout. When market views tend to align, contrary operations become a form of survival wisdom.
The key to winning this tug-of-war between bulls and bears may lie in who can withstand this wave of volatility traps dominated by major funds. Staying calm and maintaining rhythm is the most important strategy at this stage.
