Bitcoin retreats from new record, but cryptocurrencies bounce back.

On Wednesday, cryptocurrencies rebounded, recouping a significant portion of the losses incurred the day before due to a sudden sell-off, which occurred shortly after bitcoin reached a new record high.

According to Coin Metrics, Bitcoin jumped 7.2% to $66,801.38, while Ethereum rocketed more than 12% to $3,793.99, its highest level since January 2022.

Bitcoin hit a new intraday high of $69,210 on Tuesday, marking the first time since November 2021. Despite its recent surge, which has seen it increase by 55% in the past month, it fell shortly after reaching the new record.

David Wells, CEO of Enclave Markets, stated that yesterday's market correction appeared bullish to him, which is typical when reaching a multiyear all-time high.

"Another test of the highs is likely, and if we surpass that, it could become exciting due to the numerous options positions," he stated. "These rallies may involve sudden reversals linked to highly leveraged long momentum trades re-entering at critical levels."

On Wednesday morning, CoinGlass reported that $336 million in liquidations took place across centralized exchanges in the previous 24 hours, with $100 million in short liquidations and $236 million in long liquidations.

When traders short bitcoin with leverage and the cryptocurrency's price increases, they buy back bitcoin to close their positions, which drives up the price and causes more positions to be liquidated. However, traders who bet on a price increase must sell their assets to cover their losses.

The price of other cryptocurrencies, including Bitcoin and Ether, surged nearly 11%, while Bitcoin and Ether advanced 7%. Meme coins were the biggest gainers, with Dogecoin up 18% and Shiba Inu coin jumping 23%.

Crypto-related stocks advanced nearly 6% and climbed 5.5%, respectively.