Recent events in the cryptocurrency market completely shifted sentiment from neutral to bullish. The SEC finally approved Bitcoin spot ETFs, igniting a bull rally for most cryptocurrencies.
In this occurrence, traders closed millions of dollars worth of short positions, reducing the likelihood of short squeezes. Nevertheless, it is still possible to find small liquidity pools in the market, which can quickly become market makers’ targets.
By opening a short position, traders create liquidity pools upwards, due to stop losses and pre-defined margin call prices. Essentially, if the cryptocurrency reaches these prices, the positions are closed or liquidated, skyrocketing the price on further liquidity pools. This is what is called a short squeeze.
In particular, Dogecoin (DOGE) and BNB Chain (BNB) still have some liquidity at higher price levels despite their low volume. Finbold used data from CoinGlass, retrieved on January 11.
Short squeeze alert for Dogecoin (DOGE)
Dogecoin is tradin
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