Cryptocurrencies bounced back 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 was last higher by 7.9% at $67,273.54, according to Coin Metrics, while ether soared more than 13% to $3,872.56, its highest level since January 2021.

On Tuesday, bitcoin reached a new intraday record, its first since November 2021, at $69,210. It had been pushing higher for weeks — 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.

“Initially, it looked like this was primarily a spot-driven profit-taking move as open interest in perpetual futures didn’t come down, nor did their corresponding funding rates come off,” said David Duong, head of institutional research at Coinbase. “But then, the price action caught up to some sizable long liquidations and reset the market. I don’t think we’ll see another large drop like this in the short-term, barring a major exogenous shock.”

Other crypto coins rebounded with bitcoin and ether. Binance coin surged 12%, while Solana advanced 9.5%. Meme coins were the biggest gainers, with dogecoin up 18% and Shiba Inu coin jumping 21%.

Crypto-related stocks rose, too. Coinbase and Microstrategy gained 10% and 18%, respectively. Cipher Mining surged 27%, while Iris Energy and CleanSpark gained 6% and 8%, respectively. Among the largest miners, Marathon Digital inched higher by 1.6% and Riot Platforms edged lower by 1%.

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