TLDR – In the following weeks shorters who are hedging the upcoming $ZERO (Zerolend) unlock will be forced to exit at a loss (higher prices) as a short squeeze movement has started brewing as seen from strong open interest, funding cost and price action.
Ingredients
- Heavily shorted by VCs and early users to hedge the (relativity small) upcoming unlock
- Open Interest is up 10x from last week on OKX
- Funding rate is at 93% on Kucoin
- Only 25% of shorts can cover through the token release; the rest will need to buy at higher prices.
- ZERO is ripe for explosive upside move this week and beyond as shorts are forced to buy back
Telegram group - Official #ZeroSqueeze: https://t.me/zeroshortsqueeze
My Twitter: https://x.com/PonzuPete
Token: ZeroLend
Ticker: $ZERO
CA: 0x78354f8dccb269a615a7e0a24f9b0718fdc3c7a7 (Linea blockchain)
#ZeroSqueeze #ShortSqueezeZero #ShortSqueezeZeroLend #ShortSqueezeTokenUnlock
It can feel like the world is in a constant state of frenzied pursuit. In this hype-driven chaos we become shepherded by those seemingly ahead of the rest of us; in the process we latch on to a blind promise of value. We read articles like these in the hopes to find that gem, that one play that will make us whole. A fool's errand where any outsider would see that it is we who are getting harvested by this system we sought to reap from, that is until we’re not.
Look, I’m not here to tell you how to spend your day, I'm here to tell you the facts and then you can do what ever the fuck you want. I saw it in GameStop, I saw it in Celcius, and I'm seeing it in $ZERO.
So if you’ll bear with me, I'll tell you a little story about how lemonade is about to be made.
In this 4 step recipe I’ll break down the key indicators that a short squeeze on $Zero is right around the corner. While I’m inherently biased I’ll keep it to the facts and let you come to your own conclusions. Let’s dive in then, shall we
Step 1 - pick the lemons
Zero is pretty much an Aave lending fork on the Linea blockchain. I could go more in depth on the fundamentals or its unique business case, but that’s beyond the scope of this article. I’ll link to Diego’s recent thread if you want somewhere to start.
Token Unlock: Snooze—It’s Only 4%
The Token unlock only releases 4% of the total supply.
The mid curve narrative is that VCs will want to hedge their vesting schedule by going short before the unlock happens around October 6th. The reality of the matter is that 4% isn’t going to drown the market with sell pressure in some sea of liquidity. It’s a non-event that’s over hedged – sure, people might try to short the market expecting a dump, but they’re likely to get crushed when they realize no one’s really panicking.
Step 2 - squeeze some lemons
Open interest and funding rates are two critical factors in the financial mechanics of a short squeeze,
Open Interest Is Rising To Absurd Levels
On both Kucoin and OKX, open interest is ballistic at the moment. The problem with OI is that it’s a $Zero sum game and someone is stepping into a trap.
The more shorts that stack up, the juicier a squeeze can become. All it takes is a little bullish momentum, and these shorts will be deep in the red. The scramble for the shorters to cover their positions will send the price up further causing a cascading effect, sending the price into orbit. It’s the same old story – too many people shortening a weak narrative.
Longs Paying a Premium — The Real Indicator
The longs are paying a hefty premium right now – the funding rate is at 93%. That means one thing—there’s serious bullish conviction, the traders paying that premium believe $ZERO’s price is going up, not down.
Let’s double click on this – when longs are paying such a fat premium, it’s because they know something the shorts don’t. This isn’t a “maybe the price will go up” situation—this is full-on belief from the longs that the market is about to punish the overconfident shorts.
The Recent Price Bounce
Tradingview - KUCOIN Spot Market
I started drafting this last night, and as you can see the rumor is becoming reality. $ZERO’s price has already bounced—unexpectedly, up 117% the past 7 days. If the unlock narrative was true we were supposed to see a gentle slide toward oblivion in anticipation of the sell pressure, right? Wrong. $ZERO has decided to rally. Another ingredient checked off for the lemonade that is about to be made.
So what’s going on here? It’s simple: the market’s telling us something – we just need to listen. There’s serious buying pressure. Sure, the shorts were hoping for a free lunch, but the first bounce earlier this week is a warning shot for what is about to come.
TVL is Climbing While Everyone’s Shorting
To bring in a quick fundamental point, this isn’t some dead project, ZeroLend’s Total Value Locked has been steadily rising since the start of 2024, and is closing in on a quarter billion dollars.
Step 3 - add Spot sugar (to taste)
The Case for Buying Spot in a Volatile Market
I’ll preface this section that nothing is financial advice, I am simply looking and reusing the strategies that worked in the past for GameStop and Celcius.
The two main routes for exposure are Spot or perps, where the latter has more potential upside, the former is where real ‘sugar’ is added. When one buys Spot, they are purchasing the actual token, not a contract tied to its price. This means there’s no risk of liquidation. In the volatile world of crypto, and especially in these types of markets, the peace of mind that comes from knowing you can’t be wiped out overnight is invaluable.
When one buys Spot, they directly affect the supply and demand dynamics of the actual token. In the case of $ZERO, with a short squeeze on the horizon, Spot purchases can actually contribute to reducing the available market supply, thereby putting additional upward pressure on the price. This isn’t just good for your portfolio—it’s also a move that can amplify the squeeze effect, pushing those short positions closer to the edge.
With Spot, there is no liquidation risk; the worst-case scenario is that the price falls and your investment is worth $0, but you still own your tokens and can hold onto them for potential future gains.
With Spot one buys the token, they hold the token, and they sell the token when they decide it’s the right time. There’s no need to worry about funding rates, which in the case of $ZERO are currently sky-high. This simplicity means traders have full control over their investment without the need to monitor hourly changes in contract terms or funding fees.
Step 4 - take a sip and enjoy, you’ve earned it!
$ZERO is teetering on the edge of a massive short squeeze.
The post mortem will be don’t short a token with strong fundamentals, a dedicated community, and increasing market attention. this hindsight knowledge won't become mainstream on CT until a few a weeks – after it's too late. For now it sits here in this fringe article, where those reading early have a powerful choice – to watch from the arena, or join the game.
My dm’s are open. Join the telegram group if you want to join the movement 🍋
Official #ZeroSqueeze Telegram group: https://t.me/zeroshortsqueeze
My Twitter: https://x.com/PonzuPete
As always, do your own research, don’t risk money you can’t afford to lose, and—if you’re shorting $ZERO—you might want to rethink that strategy before it’s too late. None of this is financial advice, go touch some grass smell some lemons.
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