Major Cryptocurrencies Fall After Trump Signals New U.S. Tariffs

U.S. President Donald Trump announced 10% tariffs on imports from eight European nations, effective February 1, as part of a pressure campaign to force Denmark to sell Greenland to the United States. The affected countries include Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. The tariffs are set to increase to 25% on June 1 if no agreement is reached.

The move has raised fears of a trade war between the U.S. and the EU, triggering a sharp sell-off in cryptocurrency markets. Bitcoin (BTC) fell below $93,000, with Ethereum (ETH) and Ripple (XRP) following the downward trend according to market data. Over $800 million in leveraged positions were liquidated in the past 24 hours, according to CoinGlass data.

Risk-off sentiment intensified as European officials considered retaliatory measures, including imposing up to $101 billion in tariffs on U.S. imports or restricting American firms' access to the EU market. This escalation has heightened uncertainty across global financial markets, particularly in risk assets like crypto.

Why Did This Happen?

Trump's announcement was framed as a response to what he called years of U.S. subsidies to Denmark and the EU by not charging tariffs. He claimed the U.S. has a strategic interest in Greenland, citing concerns over China's potential interest in the region.

The decision to increase tariffs on eight NATO allies has drawn criticism from European leaders, who called the move blackmail and warned of a dangerous downward spiral in transatlantic relations.

How Did Markets React?

Bitcoin and Ethereum both fell below key technical levels, with BTC testing the 50-day exponential moving average (EMA) at $92,396 and ETH facing rejection at its 200-day EMA according to technical analysis. The Fear and Greed Index dropped to 44, signaling a shift toward cautious market sentiment.

The largest liquidation occurred on Hyperliquid, where a BTCUSD position worth $25.83 million was wiped out according to market reports. Over 90% of the liquidations were long positions, indicating an overbought market.

What Are Analysts Watching Next?

Analysts are closely monitoring whether the U.S. and EU can reach a diplomatic resolution to prevent further escalation. Some experts suggest that the market may view the tariffs as political theater unless they lead to concrete action.

Ethereum's estimated leverage ratio has dropped, indicating that recent price movements have been driven by spot investors rather than leveraged trading. This could suggest a more stable market if leverage exposure continues to decline.

The broader market is also watching the potential legal challenges to Trump's use of the International Emergency Economic Powers Act to justify the tariffs according to legal analysis. If courts rule against the administration, the threat of further trade disruptions could subside, reducing market uncertainty.

Investors remain on edge, with over $864 million in total liquidations reported in the past 24 hours. The next critical price levels for Bitcoin and Ethereum will be closely watched for signs of stability or further deterioration.

The outcome of diplomatic efforts and regulatory decisions will likely determine whether the market sees this as a short-lived scare or the beginning of a new phase of trade conflict.