How the loop works
Suppose customers buy a lot of calls and dealers sell them. A dealer who is short calls has negative delta, so it hedges by buying stock. If the price then rises, those calls move toward the money, their delta grows, and the short-call dealer must buy more stock to stay hedged. That buying can push the price up further, which starts the next round.
This differs from a short squeeze, where short sellers buy back stock to close losing bets. In a gamma squeeze, the buying comes from hedging. Nobody has to change their view of the stock for it to happen.
An example
A stock trades at $100 and dealers are short 20,000 contracts of the $110 call. Early on, each call has a delta of about 0.29, so the dealers hold about 580,000 shares as a hedge. If the stock quickly climbs to $108, each call's delta rises to about 0.48 (30% implied volatility). The hedge is now about 960,000 shares, so the dealers have bought roughly 380,000 more shares on the way up. If that is large compared with normal trading volume, it can move the price.
What decides whether it happens
The loop needs dealers to be net short gamma near the price, and the hedge buying has to be large next to everyone else's trading. Short-dated options near the strike carry the most gamma, so they matter most. Options far from the price carry little.
Caveat: the loop is conditional. Dealers may own offsetting options, hedge with other instruments, or the buying may be absorbed by sellers. Note too that a squeeze needs dealers to be short calls, the opposite of the long-calls convention behind Orogex's GEX numbers. The map counts those calls as positive gamma, so it will not flag a squeeze built from customer call buying. A squeeze also follows no fixed script of stages. It can fade even while call buying continues, or keep going after it stops.