Bitcoin and other major cryptocurrencies fell today as investors’ fears of a potential trade war between the United States and the EU triggered over $864 million in liquidations across the crypto market.

According to data from crypto.news, the Bitcoin (BTC) price fell sharply from $95,419 to $92,284 during early Asian hours on Monday, marking a loss of 3% before stabilizing around $92,672 at press time. 

Other major cryptocurrencies such as Ethereum (ETH), BNB (BNB), XRP (XRP), and Solana (SOL) also crashed alongside the bellwether, leading the total crypto market cap down by 2.8% to $3.22 trillion during the session.

As the drop happened, over $864 million in liquidations ensued from the crypto market, with $783 million coming from long liquidations. Data from CoinGlass shows that the majority of these liquidations took place within the past 12 hours.

Long liquidations occur when a price drop forces traders with bullish bets to sell their positions to cover margin requirements and lead to a self-sustaining downward spiral. Analysts noted that today’s plunge was due to investor fears that a tariff war between the U.S. and the EU could already be at the cusp of erupting into a full-scale trade war.

Earlier on, U.S. President Donald Trump had threatened EU nations, including Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, to sell Greenland to the United States or face escalating tariffs starting at 10% from Feb. 1. These levies are scheduled to escalate to 25% by June if no deal is reached.

European leaders have called the demand direct blackmail and said it could undermine transatlantic relations and the core cohesion of the NATO alliance. Officials from the EU are preparing retaliatory measures of their own, including potential duties on 93 billion euros’ worth of American goods and activating the bloc’s anti-coercion instrument.

The fresh geopolitical uncertainty has injected new volatility into market sentiment, which was already deteriorating from a delay in the Senate markup for the largely anticipated U.S. crypto market structure bill. Following the withdrawal of support from major industry players like Coinbase, the Senate Banking Committee decided to postpone its markup hearing for the Digital Asset Market Clarity Act from its original date set last Thursday to a new time not yet revealed at press time.

Another layer of bearish underlying pressure as outflows returned across spot Bitcoin ETFs. Data from SoSoValue show that the 12 spot Bitcoin ETFs experienced $394.68 million in net outflows on Friday, Jan. 16. This followed a four-day winning streak in which the funds drew in $1.8 billion.

Bitcoin price analysis

On the daily chart, the Bitcoin price appears to be approaching a key ascending trendline that has been acting as support for its price since late November last year. This trendline support aligns with the 50-day simple moving average, making it a key technical confluence level.

If the Bitcoin price falls below this support line, it could face a sweep down to the December 18 low of $84,500. On the contrary, if Bitcoin rebounds above the 50-day SMA, it could reignite a relief rally toward the $98,000 resistance zone.

However, momentum indicators like the MACD and RSI seem to support a bearish bias, with the MACD line forming a bearish crossover with the signal line while the RSI has shifted close to the neutral line after touching the overbought level earlier last week.