Futures & Derivatives

Long squeeze explained

Squeezing the Longs

Quick definition: A long squeeze is when a sharp price drop triggers cascading Long liquidations, pushing the price even lower.

When the crowd is Long with high leverage, a small dip can trigger a wave of liquidations. The exchange sells to close those positions, driving the price down further.

Signs: persistently high positive funding, a Long ratio above 70%, and sharply rising OI.

After a long squeeze, the price often partially rebounds because the forced selling has run its course.

💡 Example

BTC drops 6% in 30 minutes, more than $300 million in Long positions are liquidated across exchanges, and the price then rebounds 3% right afterward.

📊 View real-time liquidations →

Related terms

Short squeezeA short squeeze is when a sharp price rise forces Shorts to buy back or get liquidated en masse, pushing the p…LiquidationLiquidation happens when a leveraged position has lost almost all of its margin, and the exchange automaticall…Funding rateFunding rate is a periodic fee that Longs and Shorts pay each other on perpetual contracts, keeping the contra…LeverageLeverage means borrowing extra capital from the exchange to open a position larger than the money you have. It…

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Educational content for reference only, not financial advice. Leveraged trading carries the risk of losing your entire capital.