Bitcoin rose on Thursday, continuing its rebound from the previous session as a combination of low-end buying and positive signals from Wall Street helped spur a broader recovery in the battered cryptocurrency sector.
A mass liquidation of crowded short positions also played a part in Bitcoin's recovery, as short sellers of the cryptocurrency were surprised by the sudden price jump.
Bitcoin rose 5.3% to $68,349.6 by 09:22 (Saudi Arabia time), recovering most of this week's losses.
Bitcoin benefits from buying on dips and pressure on short positions.
Bitcoin's gains came as traders heavily bought back at heavily discounted prices, as the world's largest cryptocurrency remains down almost 50% from its record highs in October.
This, in turn, put pressure on the already overstretched short positions in the cryptocurrency, leading to a downward trend in short positions. Data from the cryptocurrency aggregator Coinglass showed that $468.7 million worth of short positions were liquidated in the past 24 hours.
Sentiment towards Bitcoin has turned largely negative following a prolonged decline in the cryptocurrency's price since October. Even purchases by major institutional holder Strategy& have done little to quell concerns about a deeper price drop.
Despite this week's gains, sentiment toward cryptocurrencies remained largely negative. Coinmarketcap's Fear & Greed Index for cryptocurrencies remained largely unchanged at extreme fear as of Thursday.
Wall Street gains are fueling risk appetite, but Nvidia offers limited optimism.
Buying in cryptocurrencies was also encouraged by two days of strong gains on Wall Street, which helped improve risk appetite.
Wall Street indexes advanced on a rebound in technology stocks, ahead of highly anticipated earnings from Nvidia Group (NASDAQ:NVDA). Cryptocurrency prices tend to track US technology stocks.
The world's most valuable company delivered huge earnings and guidance Wednesday evening, as it continued to benefit from massive AI-driven demand for its chips.
But Wall Street showed limited optimism about earnings, with S&P 500 futures down 0.2% in Asian trading. A significant portion of Nvidia's earnings appeared to have already been factored into technology valuations, while lingering concerns about the company's high inventory levels and sales in China also weighed on the market.
Cryptocurrency prices today: Altcoins continue to rebound
Prices of the broader cryptocurrencies have largely continued their recent rebound, tracking gains in Bitcoin.
The world’s second-largest cryptocurrency, Ether, rose 9.4% to $2,062.71, while XRP rose 6.4% to $1.4468.
Solana and Cardano rose by 7.3% and 11.1% respectively, while BNB rose by 5.6%.
Among the meme symbols, Dogecoin rose by 8.3%, while $TRUMP added 3.5%.
But despite this week's gains, most alternative currencies, such as Bitcoin, are still suffering deep losses in recent months.
