I've noticed that many traders get confused by a simple but powerful market phenomenon 🧨 This is about squeezes — when the price makes a sharp jump or drop almost out of nowhere, without any obvious reasons.

Let's understand what is really happening. Starting with a short squeeze — this occurs when too many people simultaneously open short positions, betting on a decline 📉 But here's the paradox: instead of falling, the price starts to rise. Short sellers panic, close their positions, which means they start buying. Each closed short is another buyer in the market. This creates a domino effect: the price skyrockets 🚀, generating even more panic, more closures, and more buying. In just a few minutes, the price can jump 20-30%.

A long squeeze is a mirror process, just the opposite. Imagine: a crowd of traders opens long positions, all expecting a rise 📈 But the market pulls a sneaky fake downward. Longs start to panic, close their positions at a loss, adding selling pressure. The long squeeze intensifies as more people exit their positions — the price drops even more 💣 This is no longer just a correction; it’s a severe blow to accounts.

How to recognize this? Watch for three things. First, open interest should be high, and very skewed — either too many longs or too many shorts. Second, when the movement begins, volumes spike sharply in the opposite direction. Third, the price breaks key levels quickly and aggressively, without hesitation.

My advice: don’t try to catch these moves unless you’re prepared 🧠 Squeezes punish late entries. It’s best to observe how the market accumulates pressure and trade only after the storm has passed. When a long squeeze or short squeeze is over, a clear picture emerges — that’s when you should enter. Haste is your enemy here.