2025 Disguise: Same Setup, Same Squeeze

TL;DR

Current market rally replays 2025's pattern of violent selloff followed by positioning reset and sharp recovery.[[1]](https://www.zerohedge.com/)[[2]](https://www.zerohedge.com/the-market-ear/2025-disguise-same-setup-same-squeeze)
Hedge funds and CTAs show similar deleveraging then re-leveraging as in prior year, fueling liquidity-driven bounce.[[1]](https://www.zerohedge.com/)
Setup suggests rally may extend if 2025 script holds, but flows now dominate over fundamentals.[[1]](https://www.zerohedge.com/)

The story at a glance

The Market Ear argues markets are repeating 2025's playbook: a sharp selloff wipes out positioning, then liquidity sparks a face-ripping rally. Hedge funds, CTAs, and other players mirror last year's deleveraging and re-risking. This is reported amid recent equity bounces after de-risking, as part of ongoing flow and squeeze analysis in 2026.[[1]](https://www.zerohedge.com/)

Key points

Violent selloff leads to positioning collapse across hedge funds and CTAs, matching 2025 dynamics.[[1]](https://www.zerohedge.com/)
Rally fueled by liquidity injection and re-leveraging, turning de-risking into chase higher.
Script feels familiar because current flows and technicals align exactly with 2025's post-selloff reversal.[[1]](https://www.zerohedge.com/)
Setup from heavy shorting or light longs creates squeeze potential as buyers pile in.
Analogy implies move far from over, but dependent on continued flow momentum not fading.

Details and context

Markets went through aggressive de-risking recently, with outflows and shorting dominant, much like early 2025 before reversals. Positioning washed out, vol elevated, setting stage for systematic buying from CTAs and options flows – same as last year when squeezes accelerated.[[1]](https://www.zerohedge.com/)

This pattern shows in tech and broader equities, where panic selling flipped to panic buying in weeks. 2025 saw similar after consolidation or shocks, leading to multi-month gains until crowded.

Risk is fragility building under flows; if liquidity pauses, chase could stall like late-cycle 2025 phases.

Why it matters

Repeating 2025 dynamics means short-term upside from squeezes and flows, but highlights vulnerability to flow reversals over economic shifts. Investors face forced re-risking, amplifying gains or losses based on positioning, not just earnings. Watch positioning metrics and CTA behavior for signs rally extends or tops, though past patterns don't guarantee repeats.[[1]](https://www.zerohedge.com/)