If this were pirate and he were crazy enough to pull of this stunt, it would provide a perfect opportunity for long term investors to average down and then sit back and watch the short squeeze unfold. I would very much look forward to this scenario.
Without Bitcoinica and without shorting, where would such a short squeeze come from?I think he meant that if pirate sells too low and the price rises dramatically and forces him to buy back in at a higher price...that would squeeze him because ultimately he would have less btc
Yes. Less BTC than the outstanding BTC debt to pirate's lenders forcing pirate to have to buy more BTC in order to pay back his lenders further forcing up the price and increasing his losses. This is exactly how a short squeeze works. The net result is sell low first, then afterwards buy high.
This failed bear strategy differs from the more commonly understood failed bull strategy of buy high first, then afterwards sell low in the order of the transactions, but not in the losses produced.
