Most cryptocurrencies have accumulated huge losses in the past two weeks, with a sentiment shift from greed to fear. The currently bearish dominance has favored crypto short-sellers, who could now be exposed to a possible short squeeze.
In a sell-the-news event, Bitcoin (BTC) dropped below $40,000 in the second week following the Bitcoin spot ETF approval. The cryptocurrency market followed the leader, losing over $325 billion in capitalization since January 11’s peak.
Notably, this movement attracted bearish traders, and the market saw an increase in short positions for multiple cryptocurrencies. Therefore, cryptocurrency exchanges register accumulated liquidity upwards, which could trigger short-squeeze events at any moment.
A short squeeze happens when trading positions are closed or liquidated if the cryptocurrency reaches the liquidation prices, skyrocketing the price to further liquidity pools.
Bitcoin (BTC) is the best candidate for a short squeeze
In particular, Bitcoin is st
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