Crypto Market Sheds Over $100 Billion as Bitcoin Slides Below $92,000 on Trade War Fears

The cryptocurrency market suffered a sharp and sudden reversal, losing more than $100 billion in value within 24 hours, as a renewed wave of geopolitical uncertainty triggered a broad risk-off move across global markets. Bitcoin, the world’s largest digital asset, fell as much as 3.6%, slipping below the psychologically important $92,000 level, while major altcoins posted even steeper losses.

The selloff marked an abrupt end to what had been a promising start to the year for digital assets, and highlighted once again how tightly crypto markets remain linked to global macroeconomic and political developments—particularly when leverage is elevated and sentiment turns fragile.

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Altcoins Hit Harder as Risk Appetite Evaporates

While Bitcoin led the decline in absolute market value, losses were more pronounced across the broader altcoin complex. Ethereum, the second-largest cryptocurrency by market capitalization, dropped 4.9%, reflecting renewed caution around riskier assets. Solana plunged 8.6%, one of the steepest declines among large-cap tokens, while other major names such as Cardano also followed Bitcoin lower.

The total cryptocurrency market capitalization fell by roughly 2.8% in a single day, dropping to around $3.26 trillion. That represents a loss of approximately $111 billion since last Thursday, underscoring the speed with which sentiment can reverse in digital asset markets.

Trump Tariff Threats Spark Global Risk-Off Mood

The immediate catalyst for the crypto selloff was a resurgence of U.S.–EU trade tensions, following comments by Donald Trump over the weekend. Trump said the United States would impose a 10% tariff on goods from eight European countries starting February 1, rising to 25% in June, unless negotiations result in what he described as a deal involving the “purchase of Greenland.”

The remarks rattled global markets as trading opened on Monday. U.S. equity-index futures slid about 1%, while investors rushed into traditional safe-haven assets. Gold and silver surged to record highs, reinforcing the classic flight-to-safety pattern that tends to emerge during periods of geopolitical stress.

Cryptocurrencies, often touted as alternative hedges, failed to benefit. Instead, they behaved like high-beta risk assets, amplifying losses as uncertainty intensified.

Leverage Unwinds Accelerate the Decline

Market data shows that the downturn was significantly worsened by forced liquidations in the derivatives market. According to CoinGlass, roughly $790 million to $800 million worth of leveraged crypto positions were liquidated in the past 24 hours.

Strikingly, around 90.5% of those liquidations were long positions, indicating that traders had entered the week with heavily bullish exposure. As prices fell, automated liquidation engines and algorithmic trading strategies accelerated the move, turning what might have been a modest correction into a sharp selloff.

The largest single liquidation during the episode reportedly exceeded $25 million in the BTCUSD pair on the derivatives platform Hyperliquid, highlighting the scale of leverage that had built up beneath the surface.

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Bitcoin Breaks Below Key Levels

Bitcoin fell from around $95,500 to below $92,000 within hours, marking a decline of nearly 3.8% at its worst point. At 6:27 a.m. London time, Bitcoin was trading at approximately $92,531, hovering just above levels many traders consider critical near-term support.

Technical analysts warn that if Bitcoin fails to reclaim and hold above this zone, attention could shift quickly to $90,000 as the next major psychological level. Below that, some models point to deeper downside risk, particularly if macro pressures intensify.

Rachael Lucas, an analyst at BTC Markets, noted that traders are closely watching whether institutional demand can provide a floor. “If current support fails, $90,000 becomes the next obvious target,” she said, adding that bulls continue to point to steady institutional inflows as a counterbalance to near-term fear.

From Early-Year Optimism to Sudden Reversal

The selloff came as a shock to investors who had grown increasingly optimistic in early January. After ending 2025 in a prolonged slump, unable to recover convincingly from a brutal October rout, digital assets had shown signs of renewed strength.

Bitcoin climbed to just under $98,000 on January 14, buoyed by strong inflows into a group of U.S.-listed spot exchange-traded funds. Those inflows had fueled expectations that institutional participation could stabilize prices and support a sustained recovery.

The sudden reversal underscores how fragile that optimism remains. While institutional demand may be building, crypto markets are still highly sensitive to external shocks—especially geopolitical developments that influence global liquidity and risk tolerance.

Crypto Underperforms Other Risk Assets

Interestingly, the crypto market’s reaction stood in contrast to some traditional equity benchmarks. While U.S. stock futures fell, certain regional markets such as South Korea’s KOSPI index remained stable or even edged higher during the same period, according to market data.

This divergence suggests that cryptocurrencies may currently be behaving more like leveraged speculative instruments than broad-based macro hedges. When fear spikes, digital assets appear to absorb a disproportionate share of selling pressure, particularly when derivatives positioning is crowded.

What Comes Next: Key Risks and Scenarios

Looking ahead, analysts warn that the market may remain under pressure if trade tensions escalate or if regulatory uncertainties re-emerge. With Bitcoin now testing levels below its 50-week moving average, some technical models point to a potential deeper correction into the $67,000–$74,000 range if macro conditions deteriorate further.

However, others caution against extrapolating too aggressively. Institutional flows into spot Bitcoin ETFs, long-term accumulation by large holders, and ongoing network fundamentals could limit the downside unless the geopolitical situation worsens materially.

Much will depend on:

• Whether U.S.–EU trade tensions escalate or de-escalate
• How global equity markets digest the tariff threats
• Whether leverage continues to unwind or stabilizes

Conclusion: A Reminder of Crypto’s Macro Sensitivity

The latest crypto selloff is a stark reminder that digital assets, despite their unique technological foundations, remain deeply embedded in the global financial system. When geopolitical risks rise and investors retreat from uncertainty, cryptocurrencies are often among the first assets to feel the impact.

For now, Bitcoin’s drop below $92,000 has become a key psychological marker. Whether it holds—or breaks—will shape sentiment in the days ahead. What is clear is that as long as leverage remains high and macro risks loom large, volatility will remain a defining feature of the crypto market’s journey.

photo source: Google

By: Elsie Njenga

20th January, 2026