Bitcoin’s confident ascent faced a significant setback this week, as the world’s leading cryptocurrency fell below the $93,000 mark on Monday. The sharp decline came on the heels of President Donald Trump’s announcement regarding new tariffs imposed on eight European countries, sparking fears of a renewed trade war between the United States and the European Union.
As of Monday morning, Bitcoin experienced a 3.6% drop, sliding from $95,450 to approximately $92,000 on trading platform Coinbase. The price had previously hovered near $98,000, creating an anxious environment for investors. Despite a slight recovery to $92,580 during the course of the day, the implications of escalating trade tensions loomed over market sentiment.
Trump’s tariff strategy, which targets Denmark, Sweden, France, Germany, the Netherlands, Finland, the United Kingdom, and Norway, begins with a 10% tariff on imports effective February 1. This rate is set to escalate to 25% by June if negotiations fail, linking the tariffs to ongoing discussions surrounding the purchase of Greenland—a territory controlled by Denmark that has recently drawn Trump’s attention.
The announcement sent shockwaves through crypto markets, resulting in the liquidation of approximately $750 million in long positions within just four hours. Overall, liquidations across the market exceeded $860 million, a staggering figure that reflects the cautiousness among traders who reacted swiftly to significant risks.
Market vulnerability was mirrored in altcoin performances; major cryptocurrencies suffered even steeper losses compared to Bitcoin. Solana saw a 6% drop, XRP fell by 4%, and Dogecoin declined by over 7%. Ethereum also slipped around 3%, trading near the $3,200 level.
European Response and Market Reaction
In response to unilateral tariff actions by the U.S., French President Emmanuel Macron has urged the European Union to activate its “anti-coercion instrument.” This mechanism, describing a potential “trade bazooka,” aims to level the playing field and could limit U.S. access to EU markets. The European Union is currently evaluating retaliatory tariffs slated at 93 billion euros (roughly $108 billion) as a countermeasure.
The strong rhetoric from European leaders has thrown further fuel on the fire, raising fears of a protracted trade conflict. Carsten Brzeski, a macroeconomic expert at ING, noted that European leaders are taking a decisive stand against U.S. pressure tactics, which could lead to heightened volatility across global markets.
As risk-sensitive assets suffered, traditional safe havens such as gold and silver reached unprecedented heights, with gold futures climbing to record levels of $4,667 per ounce and silver futures surpassing $93 per ounce for the first time ever. On the other hand, U.S. equity-index futures experienced declines, with Nasdaq 100 contracts dropping over 1% as concerns about fresh tariffs spread.
The crypto market continues to witness a notable reduction in open interest, with many traders opting to downscale their leveraged positions as a reaction to heightened risk. This pattern has shifted investor focus towards liquid assets, particularly as Bitcoin approaches a crucial support level around $90,000.
Analysts emphasize that the ramifications extend beyond mere price fluctuations; as tensions escalate between the U.S. and its close allies, market stability is increasingly at stake. As Andri Fauzan Adziima, a research lead at Bitrue, pointed out, the fear of trade wars has triggered a risk-off environment among traders. The community speculates on worst-case scenarios that could result in significant market corrections reminiscent of trends seen in 2025.
As the situation develops, all eyes will be on Bitcoin’s performance in maintaining its support amid rising geopolitical tensions. The cryptocurrency has weathered many storms in recent years, but this latest episode illustrates the delicate interplay between global economics and digital asset valuation.
