Bitcoin experienced a significant decline on Monday, plummeting nearly $3,500 as tensions escalated between the United States and European officials over tariff threats from President Donald Trump. The cryptocurrency dropped 3.6% within a matter of hours, going from approximately $95,450 to just below $92,000 on Coinbase. Following this sharp sell-off, Bitcoin found a minor recovery, settling around $92,580.
The volatility in Bitcoin’s price triggered a surge in liquidations among leveraged traders. In just four hours, around $750 million in long positions were liquidated, contributing to a staggering total of over $860 million in liquidations across 24 hours.
Conversely, while Bitcoin faced adverse movements, precious metals soared to new heights, reflecting a contrasting market sentiment. Gold futures surged, hitting a record $4,667 per ounce, while silver futures ascended past $93 per ounce, marking a historic achievement.
The backdrop to these market fluctuations was President Trump’s announcement over the weekend, stating that the U.S. would impose 10% tariffs beginning February 1 on imports from several European nations, including Denmark, Sweden, France, Germany, the Netherlands, and Finland. Trump warned that this rate could escalate to 25% by June if no agreement is reached; the United Kingdom and Norway were also included in his remarks.
In response to these developments, French President Emmanuel Macron urged the European Union to activate its “anti-coercion instrument,” which is characterized as a “trade bazooka,” capable of limiting U.S. access to European markets. Moreover, the EU is contemplating €93 billion ($108 billion) in previously deferred retaliatory tariffs.
Market analysts attribute the decline in Bitcoin and the rise in precious metals to a prevalent risk-off mood among investors. Andri Fauzan Adziima, the research lead at Bitrue, noted that the escalating tariff dispute was heightening concerns over a potential trade war. Jeff Mei, COO of BTSE, explained that traders are currently preparing for a worst-case scenario where markets could revert to levels seen in April 2025. He indicated that institutional investors may also choose to de-risk their portfolios if they perceive Trump’s threats as credible when the U.S. market opens.
