Bitcoin (COIN:BTCUSD) rebounded on Thursday, extending gains from the previous session as bargain hunters stepped in and stronger sentiment on Wall Street helped lift the broader cryptocurrency market following a prolonged selloff.
The recovery was also supported by a wave of forced liquidations among heavily positioned short traders, who were caught off guard by the sudden upward move in prices.
Bitcoin rose 5.3% to $68,349.6 as of 01:22 ET (06:22 GMT), recovering the majority of losses recorded earlier in the week.
Dip buying and short squeeze fuel rebound
The latest advance came as investors moved to accumulate Bitcoin at discounted levels, with the world’s largest cryptocurrency still down nearly 50% from its record highs reached in October.
The rebound placed pressure on crowded bearish positions, triggering a short squeeze that accelerated upward momentum. Data from crypto analytics platform Coinglass showed that $468.7 million worth of short positions were liquidated over the past 24 hours.
Market sentiment toward Bitcoin had deteriorated significantly following months of declining prices since October. Purchases by major corporate holder Strategy had done little to ease concerns that further downside could lie ahead.
Despite the recent bounce, overall sentiment across the crypto market remained weak. Coinmarketcap’s crypto fear and greed index stayed largely unchanged at “extreme fear” as of Thursday.
Wall Street gains support risk assets, Nvidia reaction muted
Crypto buying was further encouraged by two consecutive sessions of gains on Wall Street, which helped revive appetite for riskier assets.
U.S. equities had rallied alongside a recovery in technology stocks ahead of closely watched earnings from NVIDIA Corporation (NASDAQ:NVDA), with cryptocurrency markets often moving in tandem with tech-sector performance.
The world’s most valuable company reported strong earnings and optimistic guidance on Wednesday evening, driven by continued demand for its artificial intelligence chips.
However, investor enthusiasm proved limited, with S&P 500 Futures falling 0.2% during Asian trading hours. Much of Nvidia’s strong performance appeared already reflected in technology valuations, while concerns surrounding elevated inventory levels and exposure to Chinese markets weighed on sentiment.
Altcoins follow Bitcoin higher
The broader cryptocurrency market also extended its recovery, largely mirroring Bitcoin’s gains.
Ether, the second-largest cryptocurrency by market value, rose 9.4% to $2,062.71, while XRP gained 6.4% to $1.4468.
Solana and Cardano advanced 7.3% and 11.1%, respectively, and BNB added 5.6%.
Among meme tokens, Dogecoin climbed 8.3%, while $TRUMP rose 3.5%.
Even so, despite this week’s rebound, most alternative cryptocurrencies — like Bitcoin — continue to reflect significant losses accumulated over recent months.