How does a short squeeze affect the days to cover ratio for popular cryptocurrencies?

3 answers

• Dilshad OmarFeb 09, 2026 · 17 days ago
  A short squeeze can have a significant impact on the days to cover ratio for popular cryptocurrencies. When a short squeeze occurs, it means that there is a sudden increase in demand for a cryptocurrency that has a high number of short positions. This surge in demand can lead to a rapid increase in the price of the cryptocurrency, which in turn reduces the number of days it would take for all the short positions to be covered. In other words, the days to cover ratio decreases as the price rises due to the short squeeze.
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• Kirkpatrick QuinnNov 21, 2025 · 3 months ago
  When a short squeeze happens in the cryptocurrency market, it creates a buying frenzy as short sellers rush to cover their positions. This increased buying pressure drives up the price of the cryptocurrency, causing the days to cover ratio to decrease. The days to cover ratio is a measure of how long it would take for all the short positions to be closed based on the average daily trading volume. So, when the price rises rapidly due to a short squeeze, it means that the short positions can be covered in a shorter period of time, resulting in a lower days to cover ratio.
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• Adil AzizJun 19, 2025 · 8 months ago
  Short squeezes can have a significant impact on the days to cover ratio for popular cryptocurrencies. When there is a short squeeze, it means that there is a sudden increase in demand for a cryptocurrency that has a high number of short positions. This increased demand leads to a rapid increase in the price of the cryptocurrency, which in turn reduces the number of days it would take for all the short positions to be covered. As a result, the days to cover ratio decreases. This phenomenon can be observed in various cryptocurrencies, including Bitcoin, Ethereum, and Litecoin.
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