Bitcoin's price tumbled during the early Monday Asian trading session, dropping from a peak of $95,385 to approximately $92,415, a decline of roughly 3.1%. This sharp move triggered a massive wave of liquidations, with over $865 million in leveraged positions being forcibly closed across crypto markets within a 60-minute period. Approximately 90% of these liquidations were from bullish investors betting on a continuation of last week's uptrend.
The selloff is attributed to a broad shift in global risk appetite, driven by geopolitical tensions rather than crypto-specific factors. The catalyst was President Donald Trump's announcement over the weekend that he would impose punitive tariffs on eight European nations—Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland—starting February 1. The tariffs, beginning at 10% and escalating to 25% by June 1, are contingent on these countries agreeing to a U.S. acquisition of Greenland, which Trump justified on national security grounds related to missile defense.
The news rattled global markets, leading to a flight to safety. Gold hit a record $4,690.59 per ounce, while Asian equity markets broadly declined. The total cryptocurrency market capitalization fell 2.8% to $3.26 trillion, erasing over $111 billion in value since the previous Thursday. Ethereum mirrored the downturn, falling 2.2% to $3,240.
Analysts emphasized that Bitcoin's correlation with traditional risk assets has strengthened. "The recent pullback in Bitcoin is being driven less by crypto-specific fundamentals and more by a broader shift in global risk sentiment," said Ryan Lee, chief analyst at Bitget. "Heightened macro uncertainty, combined with profit-taking after a strong run, has pushed investors into a more cautious posture across equities, commodities, and digital assets alike."
The targeted European nations issued a joint statement condemning the tariff threats as undermining transatlantic relations. French President Emmanuel Macron's aides indicated they would ask the EU to activate its never-before-used anti-coercion instrument against Washington, while Bloomberg reported EU member states are discussing retaliatory levies on $108 billion worth of U.S. goods.
Looking ahead, analysts expect continued volatility and a cautious market posture. Lee forecasts Bitcoin to trade in a tight range for the remainder of January, with potential support forming around the $85,000 level, as the market digests the escalating U.S.-EU trade tensions.
