Cryptocurrencies recover after bitcoin retreats from new record

Cryptocurrencies bounced on Wednesday, recovering much of the losses from the previous day's sell-off, which came soon after bitcoin hit an all-time high.

Bitcoin jumped 7.2% to $66801.38, according to Coin Metrics, while ether rocketed more than 12% to $3,793.99, its highest level since January 2022.

On Tuesday bitcoin reached a new intraday record, for the first time since November 2021, of $69,210. It had been pushing higher for weeks – it's up 55% over the past month – and tumbled shortly after notching the new high.

"Yesterday seemed like a bullish sharp correction to me, which is fairly typical when you reach a multiyear all-time high," said Enclave Markets CEO David Wells.

"There will probably be a second test of the highs, and if we break through that, it could get interesting given the large options positions," he added. "These melt ups include sharp corrections likely related to leveraged long momentum positions taking gains at key levels then getting back in lower."

As of Wednesday morning, $100 million in short liquidations and $236 million in long liquidations occurred across centralized exchanges over the previous 24 hours, according to CoinGlass.

When traders use leverage to short bitcoin and the cryptocurrency's price rises, they buy bitcoin back from the market to close their positions, which pushes the price up and causes more positions to be liquidated. By contrast, traders betting on a price increase must sell their assets to cover their losses.

Other crypto coins rebounded with bitcoin and ether. Binance surged nearly 11%, while Solana advanced 7%. Meme coins were the biggest gainers – with dogecoin up 18% and Shiba Inu coin jumping 23%.

Crypto related stocks rose too. Coinbase and Microstrategy gained 5% and 8%, respectively. Marathon Digital advanced nearly 6% and Riot Platforms climbed 5.5%.

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