At a Glance
- Bitcoin dropped to a six-day low, most altcoins fell even harder
- Over $870 million liquidated in 24 hours, nearly $790 million from longs
- Nearly 250,000 traders liquidated, per CoinGlass data
- Why it matters: Trade war fears between US and EU are spilling into crypto markets, causing massive losses for leveraged traders
Asian markets opened Monday to a sea of red across crypto. Bitcoin plunged to a six-day low while altcoins posted even steeper losses. The trigger: escalating trade tensions between the United States and European Union.
Trade War Sparks Crypto Selloff
The latest flashpoint centers on Greenland. President Donald Trump has declared that U.S. national security depends on the “complete acquisition” of the territory, which Denmark controls.
Eight EU nations responded by deploying soldiers to Greenland for a reconnaissance mission. Trump hit back immediately, imposing new 10% tariffs on all eight countries effective February 1.
The EU convened an emergency meeting. French President Emmanuel Macron reportedly advocated activating an “anti-coercion instrument” nicknamed the “trade bazooka.” This mechanism, never before used, would restrict American access to European markets.
Markets React: Crypto Crashes, Gold Soars
While U.S. spot markets remained closed for Martin Luther King Jr. Day, Asian markets tumbled. The dollar weakened against the yen and Swiss franc. Nasdaq futures dropped up to 1.3%.
In crypto, the damage was severe:
- Bitcoin struggled to stay above $92,500
- Most altcoins posted larger percentage losses
- Gold surged to another all-time high
The contrast prompted trader Travis Connors to post on social media: “Gold vs Bitcoin right now 😂 I love this industry.”
Liquidation Tsunami
The price collapse triggered massive liquidations. According to CoinGlass data:
- $870 million liquidated in 24 hours
- $790 million came from long positions
- Nearly 250,000 traders were liquidated
Long traders bore the brunt as prices moved against their bullish bets. The liquidation volume ranks among the highest in recent months.
What’s Next
With the U.S. returning from holiday and EU leaders meeting, markets face a critical week. The trade dispute shows no signs of de-escalation. Trump has maintained his hardline stance on Greenland while EU officials consider retaliatory measures.
For crypto traders, the episode underscores how quickly geopolitical events can trigger violent price swings. The correlation between traditional risk assets and cryptocurrencies remains strong during periods of global uncertainty.
Key Takeaways
- Trade war fears drove crypto markets sharply lower
- Bitcoin’s drop to $92,500 triggered $870M in liquidations
- Gold hit new highs as investors sought safe havens
- EU considering unprecedented retaliation against U.S. tariffs
- Nearly 250,000 traders faced liquidation in the selloff
