Sign Up on MEXC
DAILY NEWSLETTER
Your daily dose of Crypto news, Prices & other updates..
A short squeeze occurs when there is an excess of short selling of a stock or a cryptocurrency rather than underlying fundamentals. A short squeeze occurs when there is a lack of supply and an excess of demand for a particular stock or a cryptocurrency due to short sellers having to buy stocks to cover their short positions.
A short squeeze is an unusual condition that triggers a sudden rise in the prices of a stock or cryptocurrency. For a short squeeze to happen, the tradable stock or crypto must have an unusual degree of short sellers holding positions in it. The short squeeze begins when the price sees a sudden jump, defying market expectations. The condition plays out as a significant measure of the short sellers coincidentally deciding to cut losses and exit their positions.
Celsius’s token jumped over 2,000% within months after the company had filed for bankruptcy. A group of traders on social media saw an opportunity to hurt short sellers when most traders had bet on the downfall of the CEL token. This group of short squeezers forced short sellers to buy back at a higher price to cover their positions.
In January 2021, a group of traders on Reddit came together to short-squeeze the stocks of video game company GameStop in a famous incident. Hundreds of thousands of retail traders came together to push GameStop’s shares up to an all-time high of almost $500. Before the surge, GameStop’s stock had been valued at $17.25.
Share on
DAILY NEWSLETTER
Your daily dose of Crypto news, Prices & other updates..
5M+ Monthly Page Views
50k+ Articles
