Bitcoin prices dropped over the weekend and failed to mount a notable recovery today.
getty
Bitcoin prices traded close to $92,000 on Monday, January 19, after the digital currency took a tumble as a result of concerns surrounding a potential escalation of tariffs between the U.S. and the European Union.
The world’s most prominent digital currency fell to $91,935.30 close to 8:30 p.m. EST on Sunday, after trading above $95,000 earlier in the day, according to Coinbase data from TradingView. It then recovered to more than $93,200 around 4 a.m. EST on Monday.
The cryptocurrency proceeded to experience another downward movement, falling to approximately $92,700 around 10:30 a.m. EST, before bouncing back to an intraday high of roughly $93,300 close to noon, additional Coinbase figures from TradingView reveal.
Bitcoin prices then proceeded to decline, falling to almost $92,300 around 7:30 p.m. EST, a level they were close to at the time of this writing.
When providing input on the digital asset’s latest price fluctuations, analysts polled for this article offered insight on what caused bitcoin prices to drop over the weekend. For the most part, they focused on concerns surrounding the possible imposition of additional tariffs, while some of them mentioned other factors, for example low liquidity and leverage, as exacerbating price movements.
President Donald Trump posted on Truth Social that starting February 1, eight countries, specifically “Denmark, Norway, Sweden, France, Germany, The United Kingdom, The Netherlands, and Finland,” will have to pay a 10% tariff on all goods and services they sell to the U.S. On June 1, that figure will escalate to 25%.
This development has seemingly provoked members of the EU, as representatives of the 27 countries that make up this group met on Sunday to discuss how they will respond, according to a Bloomberg report.
Stefan Lutz, CEO of BitMEX, commented on such matters. “Sometimes the reason behind these movements is opaque and you have to read between the chart lines to understand market movements. At other times, like today, it’s much simpler: trade wars are back on the menu.”
“In fairness, the truth is a little more nuanced than this – global tensions have been rising all year and the Greenland debacle is merely the latest and strangest stage for growing geopolitical disquiet,” stated Lutz. “No one wants another U.S.-EU trade war, and while President Trump’s bark is often worse than his bite, the market has acted exactly as you would expect it to.”
Jacob Joseph, research analyst at CoinDesk Data, offered a similar take on the matter, stating that “Bitcoin’s recent decline below $93,000 has coincided with heightened macroeconomic uncertainty, particularly surrounding renewed trade tensions.”
“These include tariff measures announced by President Trump against countries opposing the U.S.-Greenland deal, as well as consideration of retaliatory tariffs imposed by the European Union in response,” he clarified. “The resulting risk-off sentiment has weighed on broader traditional markets, with spillover effects into the digital asset sector.”
Jonatan Randin, senior market analyst at PrimeXBT, shed some additional light on what drove bitcoin’s recent declines.
“The initial 3% decline triggered $865 million in liquidations within 24 hours, with 90% coming from overleveraged longs,” he stated via emailed comments.
“That selling pressure was compounded by large holders moving coins to exchanges at the highest rate in 10 months, while ETF outflows of nearly $400 million added further weight after $1.7 billion came in earlier in the week.”
Paul Howard, senior director at crypto trading firm Wincent, also chimed in, specifying that “With the US on Martin Luther King holiday, post-weekend liquidity is thin, which has contributed to a 2.2% drawdown that is likely outsized relative to the catalyst.”