Short Squeeze Expected as CleanSpark Pushes Back Against Bearish Traders

CleanSpark Inc. (CLSK) has become a center of attention among cryptocurrency traders, driven by both fundamental and chart-based signals that point to the possibility of a short squeeze. Over the last five sessions,

shares have climbed 13%, including a 1% uptick in the days before the Federal Reserve Open Market Committee (FOMC) announcement. Investors are closely monitoring the Fed for signs it might ease monetary policy, especially as inflation stays high and employment numbers disappoint. This economic landscape has made digital assets more attractive, indirectly boosting companies involved in blockchain mining such as .

Short interest in CleanSpark stands at 32.67% of its float, with a short interest ratio of 4.0 days to cover, highlighting a strong bearish stance among traders. Such a high level of short interest raises the odds of a short squeeze if CLSK continues trending upward. In this environment, short sellers could be forced to buy back shares quickly, fueling further gains in the stock price. The elevated short interest also signals a split in market sentiment, as skeptics short the stock while optimistic traders anticipate more upside.

From a technical analysis point of view, CLSK is forming what’s known as a bullish pennant pattern—often identified after a period of consolidation and typically preceding an upward breakout. Market analysts have pointed out that when this pattern is paired with significant short interest, the potential for a strong rally increases. The stock’s recent momentum, with moves above important moving averages and a breakout from consolidation, further supports the case for a continued climb, especially if short sellers are forced to exit their positions.

The chance for a short squeeze has also caught the eye of meme-stock enthusiasts and risk-seeking investors, who are frequently attracted to stocks with high volatility and large short positions. For CLSK, these traders might see a high-risk, high-reward scenario amid current market dynamics. A popular speculative option being discussed is a bull call spread with $13 and $14 strikes expiring on November 21. This options

could yield a 300% profit if CLSK hits $14 by expiration, though breaking even would require the stock to rise almost 17% from where it currently stands. While this approach is aggressive, the mix of technical strength and increasing short interest could provide the necessary momentum for success.

Current market conditions are also favorable to CLSK. As a major

miner with a computing power of about 31.5 exahash per second and 676 megawatts in development, CleanSpark is well placed to profit if cryptocurrency values rise. Should the Federal Reserve adopt a more accommodative stance, lowering rates could spur greater risk-taking and speculative behavior, potentially fueling further gains for CLSK over the coming months.

Despite the excitement around potential short squeezes and speculative trading, investors should be aware of the substantial risks these strategies entail. The volatility of CLSK, paired with its high short interest, means that any unfavorable price movement could result in a swift downturn. Furthermore, even though the technical outlook is promising, it is not infallible, and market conditions can shift rapidly. Anyone considering investing in CLSK should carefully evaluate their risk capacity and be prepared for the possibility of sharp price swings.