Crypto markets stabilized Thursday following Wednesday’s tariff-driven volatility, 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 after swings triggered by U.S. President Donald Trump’s tariff-related remarks. Market tensions eased after Trump first reassured that “force” would not be used over Greenland and later canceled planned EU tariffs, sending both equities and crypto higher in what has been dubbed the “taco trade.”

The move underscores crypto’s continued correlation with equities, while gold’s pullback from record highs indicates traders are rotating from safe-haven assets back into risk-on positions. Ether (ETH) traded near $3,000, up 0.86% since midnight UTC, reflecting gains across the broader altcoin market.

Derivatives and Market Dynamics
Wednesday’s volatility triggered roughly $593 million in crypto derivative liquidations, affecting long and short positions equally during bitcoin’s drop to $87,200 and its subsequent rebound.

BTC’s 30-day implied volatility fell from 44.3 early Wednesday to 40.62, signaling reduced hedging demand in the options market. Open interest for bitcoin declined 0.34% over the past 24 hours while prices rose 0.84%, reflecting profit-taking among short positions amid modest new futures demand.

Funding rates remain positive across most crypto pairs, signaling a general bullish bias. Axie Infinity (AXS) is an outlier with negative rates following a 126% rally over the past week. Bitcoin’s long/short ratio — measuring accounts going long versus short — rose to 2.04 from last week’s 1.18, further highlighting bullish sentiment.

Altcoins and Sector Highlights
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) climbed 6.58% since midnight UTC and 50.8% year-to-date, outperforming other benchmarks and signaling growing interest in blockchain gaming.

Privacy-focused tokens lagged, with Dash (DASH) down 2.8% and Night (NIGHT) down 4.4% over the past day. Monero (XMR) and Zcash (ZEC) fell 27% and 17%, respectively, over the past week.

The decentralized finance (DeFi) sector remains resilient, with stablecoin-dominated total value locked (TVL) continuing an upward trend since 2023. This contrasts 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, buoyed by metaverse token gains and larger increases for XRP and BNB, both up roughly 2.5%, compared with bitcoin’s 0.74% rise.