Bitcoin volatility shrinks as tariff jitters fade: Crypto Markets Today

The crypto market was relatively stable Thursday with bitcoin $BTC$89,884.86 ranging between $89,300 and $90,200 following volatility spurred by tariff-related comments from U.S. President Donald Trump on Wednesday.

The political toing and froing between the European Union and U.S. came to a head in Davos, with Trump initially easing fears by saying "force" would not be used over Greenland before canceling plans to impose tariffs on the EU, sending markets higher in what's become known as a taco trade.

Bitcoin and the broader crypto market continue to track equities while gold is cooling from record highs, suggesting traders are rotating back from haven assets into risk assets.

Ether ETH$2,985.57 currently trades at $3,000 having risen by 0.86% since midnight UTC, mirroring a move across the altcoin sector.

Derivatives positioning

• Wednesday's volatility drove $593 million worth of liquidations across crypto derivatives, with an equal number of long and short positions being swept up during bitcoin's plummet to $87,200 and subsequent recovery.
• $BTC's 30-day implied volatility (IV) fell from a high of 44.3 early Wednesday to 40.62, suggesting a cooling of appetite in hedging instruments on the options market.
• Open interest (OI) for bitcoin fell 0.34% in the past 24 hours while the price increased by 0.84%. The divergence demonstrates profit-taking among those in short positions alongside a lack of immediate futures demand on the buyside.
• Funding rates across the majority of crypto trading pairs remains positive, indicating a bullish bias, although one outlier is axie infinity (AXS), which has negative rates after a 126% rally over the past seven days.
• The long/short ratio for bitcoin, which assesses the total number of accounts going long or short as opposed to the nominal dollar amount, is at 2.04 after rising from last week's low of 1.18, indicating a bullish bias.

Token talk

• The altcoin market was again led by the metaverse sector, with SAND$0.1639 token rising by 10.8% in 24 hours as traders began to rotate profits from axie infinity's rally.
• CoinDesk's Metaverse Select Index (MTVS) is up by 6.58% since midnight UTC and 50.8% since the start of the year, significantly beating all other benchmarks as a potential bullish narrative begins to emerge around blockchain gaming.
• Privacy tokens dash DASH$67.23 and NIGHT$0.05825 lost 2.8% and 4.4% respectively over the past 24 hours as positive sentiment around the trade of 2025 begins to wane. Monero XMR$505.91 and zcash ZEC$358.76 have lost 27% and 17% over the past week.
• The decentralized finance (DeFi) market continues to show strength as the stablecoin-dominated total value locked (TVL) remains in clear uptrend dating back to 2023, a stark contrast to the last cycle when TVL unsustainably spiked to $176 billion before tumbling to below $50 billion in a matter of months.
• CoinMarketCap's "altcoin season" indicator ticked up overnight from 26/100 to 29/100, which can be attributed the metaverse rise as well as larger gains for crypto majors XRP and BNB, both up around 2.5%, compared to bitcoin's 0.74%.