It's a question that I have struggled with myself. I was looking for an elegant way to explain my answer, and discovered that the main things I wanted to say were in the Bible passage that you referred to.
Jesus makes it clear that forgiveness is not optional. If you don't find 70x7 convincing, then read the terrifying parable from verse 21 onwards.
We always hope that forgiveness will lead to restored relationships. But the earlier verses I have quoted below recognise that this does not always happen. If your friend refuses or is unable to change, then it may be legitimate to walk away.
It's quite easy to write this out in the abstract. In reality, friendships, hurt, disappointments, loyalty and feelings of guilt mean that these kinds of situations can be very messy. It is more to do with applying wisdom than with applying hard and fast rules.
Matthew 18:15-35
"If your brother sins against you, go and show him his fault, just between the two of you. If he listens to you, you have won your brother over. 16But if he will not listen, take one or two others along, so that 'every matter may be established by the testimony of two or three witnesses.'[c] 17If he refuses to listen to them, tell it to the church; and if he refuses to listen even to the church, treat him as you would a pagan or a tax collector.
18"I tell you the truth, whatever you bind on earth will be[d]bound in heaven, and whatever you loose on earth will be[e] loosed in heaven.
19"Again, I tell you that if two of you on earth agree about anything you ask for, it will be done for you by my Father in heaven. 20For where two or three come together in my name, there am I with them."
21Then Peter came to Jesus and asked, "Lord, how many times shall I forgive my brother when he sins against me? Up to seven times?"
22Jesus answered, "I tell you, not seven times, but seventy-seven times.[f]
23"Therefore, the kingdom of heaven is like a king who wanted to settle accounts with his servants. 24As he began the settlement, a man who owed him ten thousand talents[g] was brought to him. 25Since he was not able to pay, the master ordered that he and his wife and his children and all that he had be sold to repay the debt.
26"The servant fell on his knees before him. 'Be patient with me,' he begged, 'and I will pay back everything.' 27The servant's master took pity on him, canceled the debt and let him go.
28"But when that servant went out, he found one of his fellow servants who owed him a hundred denarii.[h] He grabbed him and began to choke him. 'Pay back what you owe me!' he demanded.
29"His fellow servant fell to his knees and begged him, 'Be patient with me, and I will pay you back.'
30"But he refused. Instead, he went off and had the man thrown into prison until he could pay the debt. 31When the other servants saw what had happened, they were greatly distressed and went and told their master everything that had happened.
32"Then the master called the servant in. 'You wicked servant,' he said, 'I canceled all that debt of yours because you begged me to. 33Shouldn't you have had mercy on your fellow servant just as I had on you?' 34In anger his master turned him over to the jailers to be tortured, until he should pay back all he owed.
35"This is how my heavenly Father will treat each of you unless you forgive your brother from your heart."
