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Cryptocurrencies recover after bitcoin falls to new record high
- On Tuesday, bitcoin hit a new intraday high, for the first time since November 2021.
- Other crypto coins rebounded along with bitcoin and ether.
Selim Korkutata | Anadolu Agency | Getty Images
Cryptocurrencies rebounded on Wednesday, recouping much of the losses from the previous day’s sell-off, which came shortly after bitcoin hit a record high.
Bitcoin was last up 7.9% at $67,273.54, according to Coin Metrics, while ether climbed more than 13% to $3,872.56, its highest level since January 2021.
Tuesday, Bitcoin hits new intraday record, its first since November 2021, at $69,210. It had been on the rise for weeks – up 55% over the past month – and fell shortly after hitting a new high.
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Bitcoin rebounds after Tuesday’s massive sell-off
“Yesterday seemed like a strong bullish correction to me, which is pretty typical when you hit a multi-year all-time high,” said David Wells, CEO of Enclave Markets.
“There will probably be a second test of the highs, and if we pass that, it could become interesting given the large options positions,” he added. “These mergers include sharp corrections likely related to leveraged long positions that take gains at key levels and then reverse to the downside.”
As of Wednesday morning, $100 million in short liquidations and $236 million in long liquidations took place on centralized exchanges over the previous 24 hours, according to CoinGlass.
When traders use leverage to sell Bitcoin and the price of the cryptocurrency rises, they buy Bitcoin back into the market to close their positions, driving the price up and leading to liquidation of a higher large number of positions.
“Initially, it appeared to be mostly spot profit-taking, as open interest on perpetual futures did not decline, nor did the corresponding funding rates declined,” said David Duong, head of institutional research at Coinbase. “But then the price action caught up with some long, large sell-offs and reset the market. I don’t think we’ll see another big drop like this in the near term, barring a major exogenous shock .”
Other crypto coins rebounded along with bitcoin and ether. Binance Coin jumped 12%, while Solana advanced by 9.5%. Meme coins were the biggest gainers, with dogecoin up 18% and Shiba Inu Coin jumping 21%.
Crypto-related stocks also rose. Coinbase And Microstrategy gained 10% and 18% respectively. Cipher Mining jumped 27%, while Iris Energy and CleanSpark gained 6% and 8%, respectively. Among the largest miners, Digital marathon increased slightly by 1.6% and Riot platforms fell slightly by 1%.
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