A short crypto squeeze is triggered when a cryptocurrency increases in price at a rapid pace. This will trigger a lot of margin calls and in the worst case liquidations.
If liquidations occur, this will trigger a further price increase and even more short-selling liquidations.
This is also a way for large institutions to make market manipulations. If you have money under management and discover a large short position in a market you can go and buy stocks in the open market to increase the price and force a short squeeze.
One of the most famous short squeezes was when the Reddit Wallstreetbets community found that the Gamestop stock was shorted by large institutions. The community agreed to short squeeze these institutions by buying large amounts of the stock.
All-in-all, they were successful with regards to the short squeeze. However, many small traders lost large amounts of their capital when the stock was called back in price since no one could withhold the high Gamestop price.