Bitcoin experienced a sudden 3.1% decline during the early Monday Asian session, falling from $95,385 to $92,415 and triggering liquidations totaling more than $865 million. The sharp drop occurred while U.S. stock and bond markets were closed for the Martin Luther King Jr. holiday, leaving crypto markets particularly sensitive to global events. Analysts note that nearly 90% of these liquidations came from bullish traders betting on a continuation of last week’s upward momentum, highlighting the risks of leveraged positions in highly speculative markets.
This pullback comes amid renewed tensions between the U.S. and European Union, with President Donald Trump threatening punitive tariffs on Greenland and several EU allies. His weekend announcement of potential 10% export tariffs on eight countries opposing U.S. plans to annex Greenland has sparked heightened market uncertainty. Analysts at Fisher8 Capital note that this development has directly influenced investor sentiment in crypto, demonstrating how geopolitical events can now overshadow traditional market drivers.
Altcoins also suffered heavy losses alongside Bitcoin, dragging the total crypto market capitalization down 2.8% to $3.26 trillion within 24 hours, erasing over $111 billion in value since last Thursday. Market observers say this trend underscores a shift in how Bitcoin responds to macroeconomic and policy factors. While historically the cryptocurrency has followed a predictable four-year cycle influenced by halving events and network fundamentals, recent patterns suggest global liquidity conditions and political announcements are increasingly dictating price action.
Institutional voices continue to highlight Bitcoin’s long-term appeal despite short-term volatility. Cathie Wood, CEO of Ark Invest, recently emphasized Bitcoin’s capped supply as a key advantage over gold, particularly in a climate of rising institutional interest. Meanwhile, U.S. Treasury Secretary Scott Bessent reinforced the strategic importance of Greenland to U.S. interests, further elevating geopolitical risk sentiment. Prediction platforms such as Myriad Markets now assign a 54.5% probability that Trump will make a formal acquisition offer for Greenland before mid-2026, up sharply from 34.7% earlier this month.
Experts suggest that Bitcoin’s recent pullback is less a reflection of crypto-specific fundamentals and more a result of broad macroeconomic risk sentiment. Ryan Lee, chief analyst at Bitget, notes that profit-taking after strong gains, combined with heightened geopolitical uncertainty, has pushed investors into a cautious stance across equities, commodities, and digital assets alike. Looking ahead, analysts expect Bitcoin to trade within a relatively narrow range for the remainder of January, with support likely forming around the mid-$80,000 level.
Overall, the events of early 2026 highlight a market increasingly sensitive to policy developments and global risk factors, signaling a new phase in which Bitcoin’s price movements may depend as much on international diplomacy and fiscal policy as on traditional blockchain fundamentals. Investors are advised to monitor both geopolitical developments and liquidity conditions closely, as these forces are poised to shape crypto market dynamics in the months ahead.
