Bitcoin Stabilizes as Tariff Concerns Ease: Crypto Markets Today

Crypto markets stabilized Thursday after Wednesday’s tariff-driven swings, with bitcoin reclaiming the $90,000 level as equities rebounded and traders rotated back into risk assets.

Bitcoin (BTC) traded between $89,300 and $90,200 during Asian hours following volatility sparked by tariff-related comments from U.S. President Donald Trump on Wednesday. Market jitters eased after political tensions between the U.S. and European Union came to a head in Davos. Trump initially calmed fears by saying “force” would not be used over Greenland and then canceled plans to impose tariffs on the EU, sending equities and crypto higher in a move dubbed the “taco trade.”

Bitcoin and the broader crypto market continue to track equity markets, while gold cools from recent record highs, signaling a rotation from haven assets back into risk-on positions. Ether (ETH) is trading near $3,000, up 0.86% since midnight UTC, reflecting broader gains across the altcoin sector.

Derivatives and Market Positioning
Wednesday’s swings triggered roughly $593 million in liquidations across crypto derivatives, with long and short positions hit equally during bitcoin’s drop to $87,200 and subsequent recovery.

BTC’s 30-day implied volatility fell from 44.3 early Wednesday to 40.62, indicating a cooling in options market hedging demand. Open interest for bitcoin declined 0.34% over the past 24 hours, while the price rose 0.84%, suggesting profit-taking among short positions amid limited immediate futures demand on the buy side.

Funding rates across most crypto trading pairs remain positive, signaling a general bullish bias. Axie Infinity (AXS) is a notable exception, showing negative funding rates following a 126% rally over the past seven days.

The long/short ratio for bitcoin — measuring the number of accounts going long versus short — rose to 2.04 from last week’s low of 1.18, further reflecting bullish sentiment.

Altcoin and Token Highlights
The altcoin market was led by metaverse tokens, with The Sandbox (SAND) rising 10.8% in 24 hours as traders rotated profits from Axie Infinity’s rally. CoinDesk’s Metaverse Select Index (MTVS) is up 6.58% since midnight UTC and 50.8% year-to-date, outperforming other benchmarks and highlighting growing bullish narratives around blockchain gaming.

Privacy-focused tokens, however, saw declines: Dash (DASH) fell 2.8%, and Night (NIGHT) lost 4.4% over the past 24 hours. Monero (XMR) and Zcash (ZEC) fell 27% and 17% over the past week, respectively.

The decentralized finance (DeFi) sector remains resilient, with stablecoin-dominated total value locked (TVL) continuing an upward trend that began in 2023, contrasting with the previous cycle when TVL surged to $176 billion before crashing below $50 billion within months.

CoinMarketCap’s “altcoin season” indicator ticked up from 26/100 to 29/100 overnight, supported by metaverse token gains and larger increases for crypto majors XRP and BNB, both up roughly 2.5%, compared with bitcoin’s 0.74% rise.