BTC stabilizes around $89,000 amid ongoing risk aversion

Bitcoin steadied after Tuesday’s sharp selloff, moving in line with a broader risk-off shift in global equity markets, while altcoins posted steeper declines amid elevated volatility.

Crypto markets consolidated overnight following a heavy round of selling that drove bitcoin down to a low of $87,760. Since bottoming around 23:00 UTC, the largest cryptocurrency has edged higher and was recently trading near $89,000, placing it back in the middle of a range that has largely held since Nov. 20. The only notable break came last week, when prices briefly surged toward $98,000 during a five-day rally fueled by a more optimistic start to the year.

The move lower this week coincided with mounting risk aversion in traditional markets. Nasdaq 100 and S&P 500 futures are both down roughly 2% since Sunday’s open, following Wall Street’s largest single-day decline since October.

The shift toward safety pushed gold and silver to successive record highs as investors sought havens amid escalating concerns over a potential trade conflict between the United States and the European Union. Tensions were reignited after President Donald Trump threatened tariffs tied to Greenland’s ownership, prompting retaliatory proposals from European officials.

Thin liquidity in crypto markets amplified losses across altcoins. CoinGlass data showed that roughly $500 million in altcoin futures positions were liquidated over the past 24 hours.

Derivatives positioning

Bitcoin saw intense liquidation activity during Tuesday’s drop to $87,760, with $324 million in long positions wiped out. As prices rebounded, around $34 million in short positions were liquidated.

Bitcoin’s 30-day implied volatility jumped to 44.34 on Tuesday, its highest level since Jan. 10, as traders turned to options markets to hedge heightened uncertainty.

Open interest in bitcoin futures fell 3.25% to $28.3 billion over the past 24 hours, alongside a roughly 2% decline in price. A sharp $300 million drop in open interest around 05:00 UTC coincided with bitcoin’s brief move back toward $90,000, pointing to profit-taking among short sellers.

Despite the selloff, global funding rates remained positive, suggesting leveraged traders continue to show a bullish bias even as prices retreated.

Elsewhere, zcash saw a 2.5% decline in open interest alongside a 1.5% price increase, signaling that traders who had been short since the Jan. 8 governance dispute may be beginning to unwind bearish positions.

Token talk

Monero led declines among major altcoins over the past 24 hours, sliding 13.6% and extending its pullback to 37.25% from its Jan. 14 record high.

Ether dropped 4.5%, underperforming other large-cap tokens such as Solana and XRP, which were each down about 1.25%. Cardano proved more resilient, slipping just 0.85%.

By contrast, blockchain gaming token Axie Infinity bucked the broader downtrend, surging more than 16% on $2.1 billion in daily volume to reach its highest level since September. AXS is now up 165% since Jan. 13, underscoring relative strength among metaverse-related assets.

The CoinDesk Metaverse Select Index (MTVS) has been the standout performer this year, climbing 43.9% year-to-date, while the DeFi and memecoin indices are down 4.2% and 3.6%, respectively.

Meanwhile, WLFI, the DeFi token linked to President Trump’s family, rose 6.6% since midnight UTC, supported by rising activity around the platform’s USD1 stablecoin. Circulating supply of USD1 has increased from $2.7 billion to $3.4 billion since Dec. 24.

CoinMarketCap’s “altcoin season” index remains subdued at 26 out of 100, signaling a bearish backdrop for altcoins relative to bitcoin. However, several tokens are now deeply oversold, raising the prospect of a short-term relief bounce as soon as Wednesday.

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