Crypto markets stabilized Thursday following Wednesday’s tariff-driven swings, with bitcoin reclaiming the $90,000 mark as equities rebounded and traders rotated back into risk assets.
Bitcoin (BTC) traded between $89,300 and $90,200 during Asian hours after volatility triggered by U.S. President Donald Trump’s tariff-related comments. Market fears eased after Trump reassured that “force” would not be used over Greenland and canceled planned EU tariffs, sending both equities and crypto higher in the so-called “taco trade.”
The move highlights crypto’s continued correlation with equities, while gold’s retreat from record highs suggests traders are shifting from safe-haven assets back into risk-on positions. Ether (ETH) traded near $3,000, up 0.86% since midnight UTC, reflecting broad gains across the altcoin market.
Derivatives and Market Positioning
Wednesday’s swings drove roughly $593 million in crypto derivative liquidations, affecting both long and short positions during bitcoin’s drop to $87,200 and subsequent rebound.
BTC’s 30-day implied volatility fell from 44.3 to 40.62, signaling a cooling in options-market hedging. Open interest dropped 0.34% while bitcoin prices rose 0.84%, indicating profit-taking on shorts and limited new futures demand.
Funding rates remain positive across most crypto pairs, reflecting a bullish bias, though Axie Infinity (AXS) shows negative rates following a 126% rally over the past week. Bitcoin’s long/short ratio climbed to 2.04 from last week’s 1.18, reinforcing bullish sentiment.
Altcoins and Sector Trends
Metaverse tokens led altcoin gains. The Sandbox (SAND) rose 10.8% in 24 hours as traders rotated profits from Axie Infinity. CoinDesk’s Metaverse Select Index (MTVS) increased 6.58% since midnight UTC and 50.8% year-to-date, outperforming other benchmarks and signaling growing interest in blockchain gaming.
Privacy tokens underperformed: Dash (DASH) fell 2.8%, Night (NIGHT) dropped 4.4%, while Monero (XMR) and Zcash (ZEC) declined 27% and 17% over the past week.
The DeFi sector remains resilient, with stablecoin-dominated total value locked (TVL) continuing an upward trend since 2023, contrasting with the last cycle, when TVL surged to $176 billion before crashing below $50 billion.
CoinMarketCap’s “altcoin season” indicator ticked up from 26/100 to 29/100 overnight, driven by gains in metaverse tokens and larger increases for XRP and BNB, both up roughly 2.5%, compared with bitcoin’s 0.74% rise.
