Bitcoin’s sudden drop during the early Monday Asian session has flushed excess leverage from the system, triggering liquidations worth over $865 million.

The decline comes as U.S. stock and bond markets remain closed for the Martin Luther King Jr. holiday, with world leaders gathering in Davos for the World Economic Forum.

Crypto markets are reacting to the return of the U.S.-EU trade tensions, experts told Decrypt.



Bitcoin dropped 3.1% from $95,385 to $92,415, according to CoinGecko data. Roughly 90% of liquidations were from bullish investors betting on a continuation of last week’s uptrend.

Altcoins also dropped sharply, pulling the total crypto market capitalization down by 2.8% to $3.26 trillion over 24 hours. The market has lost over $111 billion in value since last Thursday.

Geopolitical tensions fuel uncertainty

President Donald Trump threatened to impose punitive tariffs on Greenland and other EU allies if they fail to back his plans to annex the territory, just days before heading to Davos. 

Trump announced on the weekend that eight countries would face 10% export tariffs for opposing the U.S. taking control of the island.

As a result, the crypto markets are reacting to the return of the U.S.-EU trade war and to concerns about Trump’s new proposed tariffs, Lai Yuen, an investment analyst at Fisher8 Capital, told Decrypt.

U.S. Treasury Secretary Scott Bessent echoed Trump’s plans for Greenland, noting “the fight for the Arctic is real” and that it would be in America’s best interests to make Greenland part of the U.S. Europe is too weak to ensure its own security, Bessent added.

Users on Myriad Markets, a prediction platform owned by Decrypt's parent company, DASTAN, reflect the escalating sentiment, assigning a 54.5% chance that Trump would make a formal offer to acquire Greenland before July. That probability has surged 57% from 34.7% on January 17.

“The recent pullback in Bitcoin is being driven less by crypto-specific fundamentals and more by a broader shift in global risk sentiment,”  Ryan Lee, chief analyst at Bitget, the Universal Exchange, told Decrypt. “Heightened macro uncertainty, combined with profit-taking after a strong run, has pushed investors into a more cautious posture across equities, commodities, and digital assets alike.”

Looking ahead, Lee expects Bitcoin to trade in a tight range in the second half of January with support forming around the mid-$80,000 level.

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