Greenland dispute leads to Bitcoin dropping to $92,000
st US policy were seen in Denmark and Greenland.
The repercussions of this trade dispute were felt not only in the traditional financial markets but also within the realm of cryptocurrencies. The price of Bitcoin experienced a significant drop on Sunday evening, losing almost $4,000 within a span of two hours after the EU’s retaliatory tariffs were unveiled. The value of the cryptocurrency plummeted from approximately $95,500 to a daily low of $91,935 before settling around $92,500. Just the week before, Bitcoin was on an upward trajectory, nearly reaching $98,000. However, the recent events have caused a setback.
Following the sudden price decline, there was a surge in forced liquidations totaling over $500 million within an hour. Despite some efforts to stabilize, Bitcoin is currently hovering around $92,600, showcasing a decline of about 2.5 percent in just one day.
The trigger for this market reaction was President Trump’s declaration of tariffs to be imposed on eight European nations by February 1st. He targeted Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, starting at 10 percent and escalating to 25 percent by June 1st if no resolution is reached. This move was directly linked to the US’s desire to acquire Greenland, exacerbating tensions across the Atlantic.
Unsurprisingly, affected European leaders strongly opposed these measures, warning of a potential downward spiral in relations. Danish Prime Minister Mette Frederiksen emphasized that Europe would not succumb to any form of blackmail. In solidarity, protests emerged in Denmark and Greenland over the weekend, denouncing US policies.
In tandem with these developments, the price of gold surged to an all-time high, reaching approximately $4,670, as investors sought refuge in safe-haven assets amidst the rising geopolitical uncertainties. Additionally, another layer of uncertainty looms with an impending US Supreme Court ruling on the legality of President Trump’s utilization of emergency powers to enforce tariffs. If the ruling goes against the administration, they might be obligated to refund over $100 billion in collected tariffs.
Analysts have scrutinized the recent push in Bitcoin prices, indicating that it was predominantly fueled by derivative trading rather than organic spot purchases. The current trading patterns lead experts to characterize the movement as a potential bear market rally, especially since Bitcoin remains below its 365-day average of around $101,000.
The cryptocurrency market’s fragility was further exposed by substantial liquidations amounting to over $680 million, with a majority stemming from long positions. This denotes an overly optimistic stance among traders, ultimately resulting in sharp declines. Altcoins like Solana, SUI, and ZCash also experienced significant drops ranging from 6.7 to 12 percent.
Although there are slight indications of stabilization in the market with decreased selling pressure from long-term holders and an uptick in spot purchases, analysts caution against potential drastic fluctuations due to thin liquidity and high leverage levels. The impact of the ongoing US-EU dispute continues to reverberate throughout various sectors, underscoring the interconnected nature of global markets.
