Bitcoin prices fell sharply on Monday as renewed geopolitical tensions between the United States and the European Union rattled global markets, triggering widespread losses across the cryptocurrency sector.
In early Asian trading, Bitcoin slid roughly 3 percent, dropping from around US$95,400 to a low of US$92,284, before stabilizing slightly above US$92,600 later in the session. Other major cryptocurrencies were also hit, with Ethereum, BNB, XRP, and Solana all posting significant declines. The total market capitalization of the global crypto market fell by nearly 3 percent, reaching approximately US$3.22 trillion.
The sell-off coincided with a surge in liquidations, where leveraged trading positions are automatically closed when losses exceed certain thresholds. According to CoinGlass data, more than US$864 million in crypto positions were liquidated over the past 12 hours, with around US$783 million coming from traders who had bet on rising prices. Analysts note that such forced selling tends to amplify price movements, accelerating declines during periods of market volatility.
Market sentiment weakened following threats by US President Donald Trump to impose new tariffs on several European countries unless they agreed to sell Greenland to the United States. Under the plan, tariffs would begin at 10 percent from February 1 and rise to 25 percent by June if no agreement is reached. European leaders have rejected the demand, calling it “blackmail,” while Brussels has begun preparing retaliatory measures, including potential duties on €93 billion worth of American goods.
The geopolitical dispute added pressure to an already fragile market environment. Investor confidence had been impacted by delays in US crypto regulation, following the Senate Banking Committee’s postponement of the markup hearing for the Digital Asset Market Clarity Act. Several major industry players, including Coinbase, withdrew support, leaving the timeline for the legislation uncertain.
Further strain came from outflows in US spot Bitcoin exchange-traded funds (ETFs). Data from SoSoValue showed that 12 spot Bitcoin ETFs recorded net outflows of nearly US$395 million on Friday, reversing a four-day period in which the funds had attracted about US$1.8 billion in new inflows.
Technical indicators reflect the shift in market momentum. Bitcoin is trading near a long-standing support level that has held since late November, roughly aligned with its 50-day moving average. Momentum indicators, including the MACD and the Relative Strength Index (RSI), suggest weakening upward pressure, indicating that recent buying strength has eased.
Market analysts emphasize the sensitivity of cryptocurrencies to geopolitical and regulatory developments. “The combination of US–EU trade tensions, delayed legislation, and ETF outflows has created a perfect storm for crypto volatility,” said one market strategist. “Traders are adjusting positions, and forced liquidations amplify every move.”
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The current sell-off highlights how political uncertainty and shifts in investor risk appetite continue to affect the digital asset space, which remains highly reactive to global events. While Bitcoin and other cryptocurrencies are increasingly used as investment vehicles, they are still prone to sudden swings during periods of uncertainty.
Despite the recent declines, some investors remain optimistic about long-term fundamentals. Bitcoin’s support near the US$92,000 level, combined with easing macroeconomic concerns in some regions, could provide a floor for prices in the short term. However, analysts caution that renewed geopolitical friction or regulatory setbacks could trigger further volatility.
The developments underscore the intertwined nature of cryptocurrency markets with broader geopolitical, economic, and regulatory factors. Traders and institutional investors alike are closely monitoring global developments, while liquidity and market momentum remain key drivers of near-term price action.
