You probably think that ETH pump is due to the upcoming Merge. It is partly true. Technically, the latest increase by more than 12% is coming from a phenomenon called "short squeeze", as mentioned by Glassnode on Twitter:
#Ethereum markets have rallied strongly off the back of a large short squeeze in futures markets. Over $98M in short futures positions were liquidated in one hour, pushing $ETH prices up by 12.5%.
However, after this tweet from Glassnode, you may wonder: "what is a short squeeze?"
What is a short squeeze?
According to CFI:
Short squeeze is a term used to describe a phenomenon in financial markets where a sharp rise in the price of an asset forces traders who previously sold short to close out their positions. The strong buying pressure “squeezes” the short sellers out of the market.
What happens after a short squeeze?
As the fundamentals of ETH are the same, maintaining a high valuation is challenging, and some people who bought at the bottom may book profits, causing price to plummet, as more and more traders exit. However, as the price has suddenly pumped, it may also attract new investors, and the bears could no longer be interested to keep the price down. Furthermore, with the upcoming Merge, betting on ETH dump looks quite risky for the time being.
Therefore, it is likely that the short sellers who got liquidated will try to compensate their losses by short selling another coin. Therefore, the next coin to pump could be a coin which has been short sold for which an unexpected event could suddenly pump the price leading to a liquidation of short sellers.
What could be the next short squeeze?
As we can read on social networks that Bitcoin (BTC) could go down to $10k or less, BTC could be the next short squeeze. Among the altcoins, it might be worth looking at the coins which would be short sold and to check if there could be an upcoming event which could lead to a liquidation of the short sellers. As the market remains bearish, it could make sense to look only at top altcoins - e.g., Binance Coin (BNB), Polygon (MATIC) or Avalanche (AVAX)...
Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.
Please find below a few links to earn a few coins...
![[The $0 Growth Hack]: How To Build a 1-Million-User Empire in 2 months](https://cdn.publish0x.com/prod/fs/cachedimages/3731945950-e221973c3b382a1996b83b7ff6d063e191f6be57889a4e0bf3926d37de0a6d35.jpg)
