(Bloomberg) -- Bitcoin inched back to briefly top $56,000 on Tuesday after a bout of risk aversion in global markets inflicted steep losses on most major cryptocurrencies.

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The world’s largest digital asset rose as much as 3.48% on Tuesday to partly recover from a frantic selloff that saw the token sink beneath $50,000 while second-ranked Ether suffered its steepest fall since the collapse of FTX in 2022. Bitcoin was trading at $55,770 and Ether at $2,509, up nearly 3%, as of 10:13 a.m. in Singapore on Tuesday.

Traders fear the gains may be short-lived until they see a broad improvement in the macro-economic environment and an easing of tensions in the Middle East.

“We are seeing buying on the dip,” said Sean McNulty, director of trading at Arbelos Markets. “But generally sentiment is still cautious on concerns that this is the start of a larger deleveraging process,” he added. Total liquidations in bets on crypto were about $1.1 billion on Monday, one of the largest recordings since early March this year, according to Coinglass data.

Bitcoin’s precipitous decline wiped out more than $150 billion in value in just 36 hours, prompting investors in US exchange-traded funds that invest directly in the token to yank roughly $423 million from the products.

Some traders are hopeful for a turnaround to take effect just as quickly. “It was only nine days ago that the BTC community was arguably the most bullish it’s ever been,” said Rich Rosenblum, co-chief executive officer and co-founder of GSR Markets. “BTC could rally back to $70,000 plus, just as quick as it sold off.”

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