How to spot a short squeeze in crypto

To spot a short squeeze, look for crowded-short funding (negative funding), price refusing to fall, rising open interest, and then a spike in short liquidations. That sequence means trapped shorts are being forced to buy back.

The setup

Negative funding + flat-to-rising price + climbing OI = shorts crowded and trapped.

The trigger

A move up that prints short liquidations confirms the squeeze is underway.

Read live order flow on EnsoTrade →

FAQ

What ends a short squeeze?

When trapped shorts have covered and funding normalizes, the forced buying dries up and price stalls.

Related