Why Are Bitcoin and Crypto Prices Falling Today? Key Factors Behind the Decline

Recently, Bitcoin experienced a decline, falling to $91,920, a 3.8% decrease from its previous value of about $95,500. This downward trend has heavily impacted other cryptocurrencies like Ethereum, XRP, and Solana. The primary cause of this market shift relates to geopolitical tensions and the implication of new US tariffs on various European nations.

Key Takeaways

Bitcoin dropped to $91,920, marking a 3.8% decrease; other cryptocurrencies also saw significant declines.
New tariffs proposed by the US on several European countries have created concerns in the market.
Foreign officials criticized the US tariff threats, indicating the potential for coordinated responses.
Selling pressure in the crypto market suggests the involvement of US whales, not just offshore flows.
The resulting futures market activity contributed to further price drops in cryptocurrencies.

Why Are Bitcoin and Crypto Prices Falling Today?

The recent drop in Bitcoin's price can be attributed to a sudden shift in market sentiment driven by geopolitical news. On Sunday, President Donald Trump announced that the United States would implement another 10% tariff on imports from several countries, including Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, starting February 1. If a deal regarding Greenland isn't reached, these tariffs could rise to 25% by June 1.

European officials have responded strongly to Trump's announcement, with Dutch Foreign Minister David van Weel describing it as “blackmail” and stressing that it does not benefit NATO alliances. Countries affected by this decision have warned that such tariff threats could damage transatlantic relations and lead to a dangerous downward spiral. In response, EU representatives have initiated emergency talks for possible retaliation, with French President Macron advocating for the use of the EU's “anti-coercion instrument.”

EU's Tariff Action

BREAKING: France’s President Macron calls for the EU to activate its “most potent trade weapon” against the US after President Trump’s tariff threat over Greenland.

This tariff situation is crucial for the crypto market since it represents a sudden reassessment of global growth and policy risks. When macro traders react to headlines like this, liquid markets often show the effects first, and cryptocurrencies, which operate 24/7, can quickly illustrate those pressures.

Indicators from both on-chain and exchange levels highlighted that the selling pressure was not simply from offshore markets. CryptoQuant analyst Mignolet identified an increased “Coinbase Premium Gap” (CPG), which measures the price difference between Coinbase's USD market and Binance's USDT market. This metric acts as a proxy for demand or supply dominated by US traders.

Mignolet stated, “We’re seeing the strongest selling premium (CPG) in recent periods. Since the ETF market was not open at the time, this selling pressure is primarily from US whales trading outside of ETFs. This pattern of selling is one we've seen repeatedly before.”

Coinbase Premium Gap

This context matters because it indicates that the recent price decline was not merely driven by ETF activity but rather involved more direct selling in spot/OTC and derivatives markets open over the weekend.

Once the spot price fell below certain critical levels, futures trading exacerbated the situation. According to Coinglass data, 249,422 traders were liquidated in the last 24 hours, representing a total of $874.93 million in liquidations. Of this amount, $787.92 million came from long positions while $87.01 million came from shorts. This disproportionate wipeout usually reflects a forced closure of crowded long positions as prices continued to fall.

Crypto Market Liquidation Data

At the time of publication, Bitcoin had partially recovered, showing a price of $93,000.

Bitcoin Price Chart