How the squeeze played out
A short squeeze is a familiar dynamic: a sharp price rise forces traders who had bet against the asset to buy it back to cover their positions, which pushes the price even higher. On August 25, that loop ran with unusual intensity. The exact catalyst isn't specified in the data, but the outcome is clear. Open interest, the total number of outstanding futures contracts, fell to 12% of what it had been. That means the vast majority of positions were closed out, most of them under duress.
The scale of the collapse
To put that in perspective: if open interest was at 100 before the squeeze, it's now at 12. That's an 88% drop in a single day. Leveraged shorts were the ones caught. They
