as a combination of dip-buying and positive cues from Wall Street helped spur a broader recovery in the battered cryptocurrency sector.

A massive liquidation of overcrowded short positions also played a role in Bitcoin's recovery, as short bets on the cryptocurrency were caught off guard by the sharp price surge.

Bitcoin rose 5.3% to $68,349.6 by 9:22 AM (6:22 AM ET), recouping most of this week's losses.

Bitcoin supported by dip-buying and short squeeze

Bitcoin's rise came as traders largely bought back assets at significantly reduced prices, with the world's largest cryptocurrency still nearly 50% below its October all-time highs.

This, in turn, put pressure on heavily overcrowded short positions in the cryptocurrency, triggering a short squeeze. Data from crypto aggregator Coinglass showed $468.7 million in short position liquidations over the past 24 hours.

Sentiment toward Bitcoin has turned largely negative following a sustained decline in the cryptocurrency's price since October. Buying activity by major corporate holder Strategy has also done little to allay fears of a deeper price decline.

Despite this week's gains, sentiment toward cryptocurrencies remains largely negative. Coinmarketcap's Cryptocurrency Fear and Greed Index remained virtually unchanged at "Extreme Fear" as of Thursday.

Wall Street rally boosts risk appetite, but Nvidia brings limited optimism

Cryptocurrency buying was also encouraged by two days of strong gains on Wall Street, which helped improve risk appetite.

Wall Street indices rose amid a rebound in tech stocks ahead of NVIDIA Corporation's (NASDAQ:NVDA) closely anticipated earnings results. Cryptocurrency prices tend to follow the lead of U.S. tech stocks.

The world's most valuable company delivered impressive results and guidance late Wednesday as it continues to benefit from overwhelming demand for its chips, fueled by artificial intelligence.

But Wall Street showed limited enthusiasm for the report, with S&P 500 Futures down 0.2% in Asian trading. Much of Nvidia's results appeared to have already been factored into tech company valuations, while lingering concerns about the company's high inventory levels and sales in China also weighed on the company.

Cryptocurrency Prices Today: Altcoins Continue to Recover

The broader cryptocurrency market largely continued its recent recovery, following Bitcoin's rise.

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 7.3% and 11.1%, respectively, while BNB rose 5.6%.

Among meme tokens, Dogecoin rose 8.3%, while $TRUMP gained 3.5%.

But despite this week's gains, most altcoins, like Bitcoin, are still suffering deep losses over the past few months.