Bitcoin’s sudden slide below $92,500 is being blamed on rising U.S.-EU trade war fears. But the speed of the selloff reveals something more important.
Crypto is not just reacting to geopolitics. It is showing structural weakness at a moment when traditional markets remain resilient.
That contrast matters because it exposes how fragile crypto sentiment has become after months of consolidation.
A Sharp Selloff Signals a Market on Edge
According to The Block’s bitcoin price page, Bitcoin fell from $95,500 at 5 p.m. ET Sunday to $92,474 by 9 p.m., a 3% decline in just hours.
Ethereum, XRP, and Solana moved in lockstep, confirming this was a market-wide risk-off event rather than a single-asset move.
More telling was the derivatives fallout. Coinglass data shows more than $750 million in long positions were liquidated within four hours.
Such cascading liquidations only happen when leverage is already stretched and confidence is thin.
Why Crypto Fell While Other Markets Held Firm
Min Jung of Presto Research highlighted an uncomfortable truth.
While crypto was sliding, other risk assets such as the KOSPI were flat to higher.
This means the problem is not broad financial panic. It is crypto-specific weakness.
Investors are selectively rotating away from digital assets while remaining comfortable in equities. That divergence suggests crypto is still searching for a credible near-term catalyst.
Trade War Headlines Provide the Spark, Not the Fire
The immediate trigger was political. President Donald Trump threatened tariffs starting at 10% on February 1 and rising to 25% by June on imports from eight NATO allies, Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland, unless Denmark agrees to sell Greenland to the United States.
European leaders called the move “blackmail,” and EU officials are preparing retaliation, including restrictions on U.S. services and investments, according to Reuters.
Such rhetoric injected fresh volatility into already fragile markets.
But as BTC Markets analyst Rachael Lucas explained, these headlines are not the core driver of crypto’s decline.
The Market Was Already Weak Before the News
Lucas pointed to deeper structural issues.
Crypto sentiment deteriorated after the U.S. crypto market structure bill stalled. Coinbase’s withdrawal of support led the Senate Banking Committee to postpone its markup hearing indefinitely.
At the same time, Bitcoin has been consolidating since its October 2025 all-time high near $126,000.
Traders have been steadily taking profits after an extended volatile run.
The break below the 50-week moving average triggered algorithmic selling.
Meanwhile, Spot Bitcoin ETFs shed $4.4 billion through November and December, and futures open interest fell sharply.
Together, these signals show declining risk appetite long before tariff headlines appeared.
How Low Could Bitcoin Go?
Lucas warned that if macro pressure persists, Bitcoin could fall into the $67,000 to $74,000 region.
That range reflects technical retracement zones, not panic projections.
Importantly, she stressed this does not resemble previous crypto winters.
Regulatory clarity is improving, institutional infrastructure is stronger, and adoption is broader than in past cycles.
This is a correction inside a mature market, not a systemic collapse.
What This Means for the Next Phase of the Cycle
This episode reveals a changing dynamic.
Bitcoin is no longer insulated from global politics, but it is also not the speculative frontier it once was.
The industry is transitioning into a macro-sensitive asset class that reacts to policy, regulation, and liquidity conditions.
Short-term volatility may remain elevated.
Long-term, the market is becoming more institutional, more regulated, and structurally stronger.
Pullbacks like this are part of that maturation process.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions
