Bitcoin rallied back above $93,000 on Wednesday amid a broad rally in cryptocurrency markets, recouping steep losses on Monday that triggered nearly $500 million in liquidations.
The move brought some relief after a chaotic start to the week, but the rebound did little to ease jitters following a series of structural shocks to the market.
Bitcoin was up more than 7% in the past day as of early Asian trade, trading near $93,360, reversing a massive sell-off that pushed the asset below $84,000 on Monday. Ethereum rose more than 9%, regaining the $3,000 level. Solana, Cardano, XRP and several other large-cap tokens all posted double-digit gains, with SOL and ADA both up more than 12%.
The recovery comes after a sharp selloff in derivatives markets, with about $457 million in short positions being liquidated in the past 24 hours. Bitcoin accounted for $224 million of that, while Ethereum added another $94 million, according to Coinglass.
The shakeout cleared most of the leveraged positions accumulated during the recent decline.
But despite the rebound, market sentiment remains cautious. Bitcoin’s sell-off earlier this week coincided with reduced liquidity over the weekend and the spillover effects of macro panic, creating a backdrop of volatility that exacerbated price swings.
The broader market is still digesting concerns related to corporate balance sheet risks, including sharp drawdowns in strategy-linked ETFs and an upcoming review of MSCI’s methodology, both of which have weighed on risk appetite in recent sessions.
Tuesday’s gains were aided by some incremental catalysts.
There was renewed optimism following comments from SEC Chairman Paul Atkins, who said the agency planned to detail the framework behind a proposed “innovation exemption” for digital asset companies.
It was seen as a step toward regulatory clarity after months of stalled policy development. Vanguard Group’s decision this week to allow trading of cryptocurrency-focused ETFs and mutual funds on its platform also helped boost sentiment after a long period of outflows.
Still, the structure of the rally suggests this is primarily a mitigation move rather than a shift in trend. Market depth remains mixed, with some large coins recovering from multi-week lows.
The next test is whether spot demand can sustain this trend once derivatives markets emerge from the liquidation cycle.
