@belindala
A short squeeze typically occurs when excessive short positions build up in the market, creating vulnerability. Triggers include sudden bullish catalysts such as favorable news, regulatory clarity, or large-scale institutional inflows. When the price breaks through a key resistance level, short sellers are forced to cover their positions, accelerating buying pressure. Low liquidity can magnify this effect, as even moderate spot demand pushes prices up sharply. High open interest combined with negative funding rates signals crowded short trades, making the market more prone to squeezes. In essence, the conditions are excessive leverage imbalance, unexpected bullish momentum, and the cascade of liquidations.
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