Definition ∞ Short Squeezes occur when assets that have been heavily shorted experience a rapid increase in price. This forces short sellers, who bet on a price decline, to buy back the asset to cover their positions, further driving up the price. Such events can lead to dramatic and swift price appreciations, often disconnected from fundamental value. They are a result of concentrated short selling positions being liquidated under market pressure.
Context ∞ Short Squeezes are a recurring topic in financial news, particularly in relation to volatile assets like cryptocurrencies and certain equities. Current discussions often examine the role of coordinated buying efforts and the impact of short interest data on predicting potential squeezes. Future attention will likely be on the regulatory implications and the development of tools to monitor and mitigate the risks associated with these market phenomena.
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