Bitcoin fell almost $3,500 on Monday as Europe hinted at retaliatory measures against US President Donald Trump, who threatened new trade tariffs unless negotiations could begin over Greenland.
Bitcoin (BTC) prices dumped 3.6% in a matter of hours, falling from $95,450 to just below $92,000 on Coinbase in early trading on Monday morning, according to TradingView.
Around $750 million in long positions were liquidated in four hours, bringing total 24-hour liquidations to over $860 million, according to Coinglass. The asset had marginally recovered from its weekly low, trading at $92,580 at the time of writing.
Meanwhile, precious metals have surged as they continue to decouple from digital assets, while stock futures were also down.
Gold futures soared to record highs of $4,667 per ounce as markets reacted to the resumption of the US-EU trade war, according to Google Finance. Silver futures also skyrocketed above $93 per ounce for the first time in history.
Europe retaliates to Trump tariffs
Over the weekend, Trump announced 10% trade tariffs on eight European countries — Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden and the UK — starting Feb. 1.
These would rise to 25% by June if no agreement on his push to control Greenland is reached.
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European leaders responded forcefully, with French President Emmanuel Macron urging the EU to activate its “anti-coercion instrument,” also known as a “trade bazooka,” which could restrict US access to EU markets.
The European Union is also considering 93 billion euros ($108 billion) in previously delayed retaliatory tariffs.
“At least judging from the first reactions, some European leaders are willing to play hardball,” wrote Carsten Brzeski, global head of macro at ING, according to CNN.
Trade war fears sparking risk-off mood
Crypto industry analysts told Cointelegraph the trade war could create a risk-off environment in the markets.
“I see Trump’s tariffs over Greenland sparking trade war fears and creating a risk-off mood in markets,” said Andri Fauzan Adziima, research lead at Bitrue.
“Bitcoin, acting like a tech stock, dropped below $93,000 due to liquidations and FUD, showing how it gets hit hard by big economic shakes. Short-term pain continues, but both could rise long-term if money weakening happens,” he added.
Meanwhile, Jeff Mei, chief operations officer at the BTSE exchange, said that trade war threats “are causing a bout of market unease — especially since this time he is threatening some of America’s closest allies.”
“Right now, traders are thinking about the worst-case scenario, in which markets could plunge to April 2025 levels. Once the US market opens, it’s possible that institutional investors may move to de-risk their holdings if they think Trump’s threats are serious.”
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