Bitcoin, Ethereum, and other major cryptocurrencies fell sharply earlier today as investors worried about a possible trade war between the United States and the European Union. These concerns added pressure to an already weak crypto market.
Bitcoin dropped around 3% in just a few hours, falling from about $95,500 to $92,474 on Sunday evening, according to The Block. Other large cryptocurrencies such as Ethereum, XRP, and Solana also declined, following Bitcoin’s movement.
The sudden price drop triggered massive losses for traders. Data from Coinglass shows that more than $750 million worth of long positions were liquidated within four hours. Analysts said fears of rising trade tensions between the U.S. and the EU were the main reason behind the sell-off.
According to Min Jung from Presto Research, the crypto market is currently underperforming compared to other risky assets. While concerns about a U.S.–EU trade war have hurt investor sentiment, markets like South Korea’s KOSPI have remained stable or even moved higher. This suggests that crypto is facing its own specific weaknesses, with investors choosing other assets instead.
Rising U.S.–EU Trade Tensions
Worries about a trade war increased after U.S. President Donald Trump threatened to raise import tariffs on goods from several European countries. The tariffs would start at 10% on February 1 and could rise to 25% by June unless Denmark agrees to sell Greenland to the United States. The countries affected include Denmark, France, Germany, the UK, and others.
European leaders strongly criticized the move, calling it “blackmail” and warning it could damage relations between the U.S. and Europe. According to Reuters, EU officials are now preparing possible countermeasures, such as limiting U.S. services in Europe, increasing taxes on American companies, or restricting investments.
Rachael Lucas, a crypto analyst at BTC Markets, said the latest trade war headlines have added more volatility to an already unstable market. However, she noted that these geopolitical issues are not the main reason behind the current crypto downturn.
Lucas explained that crypto sentiment had already weakened after delays in a U.S. crypto market regulation bill. The situation worsened when Coinbase pulled its support, leading the Senate Banking Committee to postpone further discussions.
She also pointed out that Bitcoin has been consolidating for months after reaching its all-time high of nearly $126,000 in October 2025. Many traders have been taking profits, and Bitcoin recently fell below its 50-week moving average, triggering automated selling. At the same time, spot Bitcoin ETFs saw $4.4 billion in outflows in November and December, while futures trading activity declined.
If these pressures continue, Lucas said Bitcoin could fall to the $67,000–$74,000 range. However, she stressed that this situation does not look like previous crypto winter periods, as the industry is now more mature and regulatory conditions are improving.
