Short Squeeze

A short squeeze is what happens when too many people are short and the price starts rising anyway. Their losses mount, stop-losses trigger, margin calls arrive, and the only way out is to buy. All that forced buying shoves the price up further, which squeezes the next group of shorts, and so on.

Squeezes can be shockingly fast and violent, because the buyers are not choosing to buy; they have to. The GameStop frenzy in early 2021 is the famous stock example, but currencies get squeezed too when a crowded bet suddenly goes wrong.