Crypto’s Momentum Hits a Wall
Just when crypto seemed to be finding its footing, global politics pulled the rug out from under the market.
Cryptocurrencies sold off sharply after US President Donald Trump proposed new tariffs on eight European countries, rattling risk assets worldwide and sending investors rushing toward traditional safe havens.
The result? A swift, brutal correction that erased nearly $100 billion from the total crypto market value in a matter of hours.
Bitcoin Drops Below $92,000 as Altcoins Bleed
The selloff unfolded during Asian trading hours on Monday, catching many traders off guard.
Bitcoin (BTC) fell as much as 3.6%, briefly slipping below $92,000
Ethereum (ETH) dropped 4.9%
Solana (SOL) was hit hardest, plunging 8.6%
While Bitcoin managed to claw back some losses—trading around 2.5% lower by early New York hours—the damage across the broader market was already done.
What Sparked the Panic?
Over the weekend, Trump announced plans to impose a 10% tariff on goods from eight European nations starting February 1, with rates rising to 25% by June unless a deal is reached involving a controversial “purchase of Greenland.”
The comments immediately:
Sent US equity-index futures lower
Pushed gold and silver to record highs
Triggered a classic risk-off reaction across global markets
European leaders fired back, signaling they may halt approval of a trade agreement finalized last year—adding another layer of uncertainty.
Risk-Off, Not Crypto-Specific
This downturn wasn’t driven by a flaw in crypto itself.
Digital assets had actually started 2026 on solid footing, rebounding after a rough end to 2025. Bitcoin climbed to nearly $98,000 on January 14, fueled by strong inflows into US-listed spot Bitcoin ETFs.
According to Richard Galvin, co-founder of hedge fund DACM, the rally was a recovery from:
“Oversold levels driven by tax-loss selling and general capitulation coming into year-end.”
The sudden tariff threat, however, slammed the brakes on that recovery.
With gold hitting all-time highs, Galvin noted the selling was “more a risk-off move than anything crypto-specific.”
Leverage Gets Wiped Out
As prices slid, leveraged traders paid the price.
Data from CoinGlass shows nearly $790 million in bullish crypto positions were liquidated in the past 24 hours, accelerating the downside move.
Market watchers are now eyeing $90,000 as a critical support level for Bitcoin.
Where Do Bulls Stand Now?
Despite the turbulence, not all hope is lost.
According to Rachael Lucas, analyst at BTC Markets:
Bears see $90K as the next downside target if support breaks
Bulls argue that institutional demand, particularly via ETFs, could act as a price floor
That tug-of-war may define crypto’s direction in the days ahead.
The Bigger Picture
This episode is a reminder that crypto, despite its growing maturity, is still deeply tied to global macro forces.
When geopolitical shocks hit and fear rises, investors instinctively rotate into gold, silver, and cash—even if crypto’s long-term fundamentals remain intact.
For now, the market waits. Will institutional demand steady the ship, or will global politics push crypto into another leg down? The next move may depend less on blockchains—and more on headlines.