A market situation that occurs when price decreases incites traders holding long positions to sell their ways out of their stock positions to avoid a dramatic loss. In other words, traders (longs) trapped in a declining market might be under pressure (squeeze) to be content with the current level of losses rather than risk substantial losses waiting for a trend reversal. In their selling into a falling market to cut their losses, they will cause a further decline in market prices.

A squeeze is also known as a long squeeze or a bull squeeze.