Bitcoin Price Rebound to $56,000 Sparks Optimism Despite Cautious Sentiment

Key Points:

• Bitcoin prices briefly surged above $56,000, recovering from a recent selloff.
• Total crypto liquidations reached about $1 billion on Monday, one of the largest since March.
• Traders remain cautious, citing macroeconomic factors and tensions in the Middle East.

Bitcoin price rebounded to $56,000, gaining 3.5% after a drop below $50,000. Cautious sentiment persists despite a $1 billion liquidation in crypto. Traders remain skeptical about a sustained rally.

On Tuesday, Bitcoin prices briefly surged above $56,000, with the leading cryptocurrency gaining up to 3.5% to partially recover from a broad selloff that had earlier seen its value drop below $50,000.

Bitcoin Price Rebound Amid Market Volatility

As of this writing, Bitcoin changed hands at $55,580, while Ether, the second-ranked cryptocurrency, climbed nearly 3% to $2,490.

Traders said gains would not last until the macroeconomic environment improved broadly and tensions in the Middle East eased. According to Sean McNulty, director of trading at Arbelos Markets, buying on the dip occurred, but overall sentiment remains cautious amid fears of a larger deleveraging process.

Read more: Bitcoin Price Crashes By 22% Amid Market Turmoil and Seized Assets

Cryptocurrency Liquidations Reach Significant Levels

As per data from Coinglass, total liquidations in crypto bets reached about $1 billion on Monday, ranking as one of the largest recordings since early March. The figures are shown as follows:

• Total Liquidation: $1.002 billion
• Number of Liquidations: Over 240,000
• Long Orders Liquidated: $705 million
• Short Orders Liquidated: $298 million
• Ethereum Liquidation: $304 million
• Bitcoin Liquidation: $384 million

Besides that, investors in U.S. exchange-traded funds that invest directly in Bitcoin pulled around $423 million from such products. Some traders are skeptical that the coin could bounce back strongly from the recent volatility.

Rich Rosenblum, GSR Markets co-chief executive officer and co-founder, reportedly said that it feels like nine days ago that the Bitcoin community was the most optimistic. He suggested that Bitcoin could rally back to $70,000 or more just as quickly as it sold off.