Bitcoin Drops Below $90,000 Amid Escalating U.S.-EU Trade Tensions and Market Uncertainty

Sharp Decline Erases Nearly $6,000 in Two Days

Bitcoin experienced a significant price decline over the past 36 hours, briefly falling below $90,000 on Tuesday morning as macroeconomic uncertainty rattled global markets ^[2]. The world's largest cryptocurrency dropped from approximately $95,500 on Sunday night to around $89,800 by Tuesday morning, erasing nearly $5,700 in less than two days ^[2].

The initial selloff began Sunday evening when bitcoin plunged nearly $4,000 within a two-hour window around 6 p.m. EST ^[2]. This wave of selling triggered massive liquidations in derivatives markets, wiping out more than $500 million in leveraged long positions in roughly an hour, with total cryptocurrency long liquidations exceeding $525 million during the period ^[2].

Tariff Threats Drive Market Volatility

The decline coincided with heightened geopolitical tensions after U.S. President Donald Trump announced plans to impose sweeping new tariffs on European nations beginning February 1 ^[2]. Under the proposal, an initial 10% tariff would apply to goods from eight countries—Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland—escalating to 25% by June 1 if no agreement is reached ^[2].

Trump linked these measures to U.S. efforts to secure Greenland, further intensifying transatlantic tensions ^[2]. European leaders responded strongly, warning that the tariff threats could trigger a "dangerous downward spiral" ^[2].

Before U.S. markets opened Tuesday, Trump shared images on Truth Social showing both Greenland and Venezuela as part of U.S. territory ^[1]. He later posted: "I had a very good telephone call with Mark Rutte, the Secretary General of NATO, concerning Greenland. I agreed to a meeting of the various parties in Davos, Switzerland" ^[1].

Traditional Safe Havens Rally While Bitcoin Struggles

As bitcoin declined, precious metals continued their record-breaking performance. Gold reached $4,750 per ounce for the first time, while silver approached $96 ^[1]. This flight to traditional safe-haven assets highlighted the divergence in investor behavior, with risk markets selling off while established stores of value attracted capital ^[2].

U.S. stock markets opened with predictable losses, with both the S&P 500 and Nasdaq Composite Index down approximately 1.5% ^[1].

Corporate Bitcoin Holdings Under Scrutiny

On-chain data revealed that GameStop allegedly transferred a total of 2,396 BTC to Coinbase Prime in January, including 100 BTC on January 17 and 2,296 BTC on January 20 ^[2]. These transfers represent roughly 51% of the company's original 4,710 BTC holdings, which were acquired in mid-2025 at an average price near $106,000 per coin ^[2]. While transfers to brokerage wallets often signal potential selling, the company has made no official announcement confirming a sale ^[2].

In contrast, Strategy (MSTR) continued aggressive accumulation, disclosing the purchase of 22,305 BTC for approximately $2.13 billion at an average price of $95,284 per bitcoin ^[2]. As of January 19, Strategy holds 709,715 BTC acquired at an average price of $75,979, representing more than 3% of bitcoin's circulating supply ^[2]. Despite this accumulation, Strategy shares fell about 7% in early trading as bitcoin slid below $90,000 ^[2].

Technical Outlook Remains Uncertain

Trader BitBull noted that bitcoin was rejected from its weekly bull market support band, pointing to overhead moving averages ^[1]. "This happened twice in Q1 2025, before BTC finally reclaimed it and hit a new ATH. As long as BTC holds above the $88,500 level, the uptrend is still intact," he stated ^[1].

Trader Il Capo of Crypto expressed cautious optimism, suggesting potential for reclaiming $100,000 on two-day timeframes ^[1]. "Support zone here. Hold this and $100k levels should be next. This could be an important higher low for the entire crypto market, before strong bullish continuation," he told followers ^[1].

As of the latest data, bitcoin was trading at $90,252, down 3% over 24 hours on $45 billion in volume ^[2]. The network's market capitalization stands at roughly $1.8 trillion, with 19.98 million BTC in circulation out of a capped supply of 21 million ^[2].