Emre Yumlu 
Global financial markets entered the week under clear risk-off pressure as escalating trade tensions between the United States and Europe unsettled investors. Signals from the European Union that it could respond forcefully to new tariff threats from U.S. President Donald Trump triggered sharp moves across asset classes. The immediate impact was felt in Bitcoin, which saw a sudden sell-off, while precious metals surged to historic highs.
Bitcoin Drops Sharply Amid Liquidation Wave
Bitcoin experienced a rapid decline during early Monday trading, falling nearly 3.6% within a few hours. The price dropped from around $95,450 to below $92,000, reflecting a swift shift in market sentiment. This move disproportionately affected leveraged traders, as long positions were aggressively unwound.
Roughly $750 million in long liquidations occurred over a four-hour window, pushing total liquidations over the past 24 hours beyond $860 million. Although Bitcoin later staged a modest rebound toward the $92,500 area, the speed and scale of the decline highlighted the market’s sensitivity to macro-driven shocks.
Precious Metals Reassert Safe-Haven Status
While digital assets struggled, traditional safe havens attracted renewed demand. Gold futures surged to an all-time high of $4,667 per ounce, signaling a strong flight to safety. Silver followed suit, climbing above $93 per ounce for the first time on record.
The divergence between crypto assets and precious metals underscored a broader reallocation of capital, as investors sought protection against geopolitical and trade-related uncertainty.
U.S.–EU Trade Dispute Escalates
The volatility was sparked by Trump’s announcement over the weekend that the U.S. would impose a 10% tariff on imports from eight European countries starting February 1. These include Denmark, France, Germany, Sweden, Finland, the Netherlands, Norway, and the United Kingdom. The tariffs could rise to 25% by June if negotiations fail, with Greenland-related geopolitical demands reportedly at the center of the dispute.
European leaders responded with strong rhetoric. French President Emmanuel Macron urged the EU to consider activating its “anti-coercion instrument,” often described as a trade “bazooka,” which could restrict U.S. access to European markets. In parallel, the EU is weighing the activation of €93 billion in previously delayed retaliatory tariffs.
Risk-Off Sentiment Takes Hold
Market participants increasingly view the situation as a catalyst for broader risk aversion. Heightened trade war fears are pressuring assets perceived as risk-sensitive, including Bitcoin. Analysts note that if uncertainty persists, volatility is likely to remain elevated across both crypto and traditional markets. In the longer term, however, the direction of global liquidity and monetary policy will remain key factors shaping market behavior.
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