I was stretched out on a massage table in the tattoo parlor (shading in some bands on my arm sleeve) and browsing through Twitter to distract from the pain when it happened.
It felt like the run up to 64k again. People were dumbfounded left and right over Bitcoin's colossal upswing from 33k to 40k in a matter of hours. In Binance's margin perpetual chart, things were even crazier, with Bitcoin hitting 48k for a very brief moment in time.
This is what the short squeeze looked like:
So, how does Bitcoin print an 11k 1-minute candle in the first place? Let's explain the short squeeze.
The Short Squeeze Explained
A short squeeze is a trading phenomenon whereby a particular security, stock, or otherwise asset is considered to be overbought or overextended and a large enough cohort of individuals take a 'short' position on the aforementioned asset. A 'short' is when an investor/trader borrows an asset at a certain price in the hopes that the market value of said asset falls. When exiting their position, they buy back at a lower price using the borrowed asset while pocketing the difference.
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