Bitcoin Slides as Crypto Market Extends Losses Despite Brief Risk Rally

Bitcoin edged lower on Friday as the broader cryptocurrency market extended recent losses, signaling that investors remain cautious despite a short-lived improvement in global risk sentiment.

Bitcoin was last trading around $89,800, down about 2% over the past 24 hours. The move followed a brief rebound earlier in the session after reports suggested easing tensions between major global economies. However, buying interest faded quickly as traders opted to reduce exposure.

Major altcoins tracked Bitcoin’s decline. Ethereum slipped more than 2%, while several mid-cap tokens recorded losses of up to 6%. Total crypto market capitalization continued to contract, reflecting persistent uncertainty across risk assets.

Market participants said the lack of follow-through after the initial rebound highlighted fragile sentiment. While global equity markets attempted a modest recovery, investors remained hesitant to re-enter volatile positions amid unresolved geopolitical and macroeconomic risks.

Bitcoin’s correlation with traditional markets remained evident. Futures tied to U.S. and European stock indices weakened later in the day, prompting renewed selling pressure in crypto markets. The U.S. dollar strengthened slightly, adding further pressure on dollar-denominated assets.

Analysts noted that Bitcoin has struggled to establish a clear trend since breaking below key technical levels earlier in the week. The $90,000 level has become a psychological threshold, with repeated failures to hold above it reinforcing short-term bearish sentiment.

Derivatives data showed subdued activity, with open interest declining across major exchanges. Funding rates remained close to neutral, suggesting that traders are avoiding aggressive long or short positioning until clearer signals emerge.

Liquidation data indicated that recent losses were driven more by spot selling than forced liquidations, pointing to a deliberate reduction of exposure rather than panic-driven exits.

Web3-related tokens and infrastructure projects also remained under pressure. Trading volumes in decentralized finance and blockchain service tokens declined, reflecting reduced speculative appetite during periods of macro uncertainty.

Looking ahead, traders are watching whether Bitcoin can stabilize above the $88,500 to $89,000 range. A sustained move below that zone could trigger additional downside, while a recovery above $90,500 may signal renewed confidence.

For now, the market remains sensitive to headlines and broader financial conditions, with Bitcoin trading as part of the global risk landscape rather than moving on crypto-specific developments.