On Monday, Bitcoin experienced a significant drop of nearly $3,500 as Europe signaled potential counteractions against US President Donald Trump. This development followed Trump’s threats to impose new trade tariffs unless discussions regarding Greenland commenced.
The price of Bitcoin (BTC) plummeted by 3.6% within just a few hours, declining from $95,450 to slightly under $92,000 on Coinbase during the early trading session on Monday morning, as reported by TradingView.
Approximately $750 million in long positions were liquidated over four hours, contributing to total liquidations exceeding $860 million within a 24-hour period according to Coinglass. At the time of writing this article, Bitcoin had made a slight recovery from its weekly low and was trading at around $92,580.
In contrast to the decline in cryptocurrency values, precious metals saw an increase as they continued their separation from digital currencies while stock futures also fell.
Gold futures surged to unprecedented levels at $4,667 per ounce in response to renewed tensions in the US-EU trade conflict according to Google Finance. Silver futures also soared past $93 per ounce for the first time ever.
BTC dropped by $3,500 within hours on Coinbase. Source: TradingView
Europe’s Response to Trump’s Tariffs
This past weekend saw Trump declare that he would impose 10% tariffs on eight European nations — including Denmark, Finland, France, Germany, the Netherlands, Norway and Sweden — starting February 1st.
If no agreement is reached regarding his demands concerning Greenland by June then these tariffs could escalate up to 25%.
Related:The escalation of Trump’s criticism towards Fed chair; Italy cautions ‘fin-fluencers’: Global Express
The reaction from European leaders was swift and assertive; French President Emmanuel Macron called for activating an “anti-coercion instrument,” commonly referred to as a “trade bazooka,” which could limit US access into EU markets.
Additonally,the European Union is contemplating retaliatory tariffs amounting up to €93 billion ($108 billion) that had previously been postponed.
“From initial reactions it appears some European leaders are prepared for tough negotiations,” noted Carsten Brzeski who serves as global head of macro at ING according CNN reports.
An Atmosphere of Caution Amid Trade War Concerns
Crypto analysts have expressed concerns about how this trade war might foster an environment characterized by risk aversion across financial markets according Cointelegraph’s insights .
“I believe Trump’s tariff threats related with Greenland are igniting fears surrounding potential trade wars leading towards cautious sentiment among investors,” stated Andri Fauzan Adziima , research lead at Bitrue .
“Bitcoin has behaved similarly like tech stocks recently dropping below$93000 due mainly due liquidation events coupled with FUD indicating vulnerability during major economic shifts . While short-term struggles persist both sectors may rebound if currency devaluation occurs ,” he further elaborated .
Jeff Mei , chief operations officer over BTSE exchange remarked that these ongoing threats stemming from international disputes “are inducing market anxiety particularly since now they involve America’s closest allies.”
“Currently traders are contemplating worst-case scenarios where markets might regress back down toward April2025 levels ; should Trump continue issuing serious warnings institutional investors may opt out reducing exposure once U.S.markets reopen.”
Magazine : Wintermute discussing crypto recovery along with BTC allocation adjustments based upon quantum risks : Hodler ’s Digest.