Bitcoin ( BTC) tumbled below the $90,000 mark on Tuesday, Jan. 20, as geopolitical tensions flared following U.S. President Donald Trump’s threat to impose 10% tariffs on European nations resisting Washington’s Greenland takeover plans. Bitstamp data showed the flagship cryptocurrency temporarily tapping $89,180, erasing bullish momentum built in recent weeks and underscoring the fragility of sentiment amid the first major transatlantic clash of 2026.
A massive liquidity injection momentarily stemmed the bleeding from Strategy, which executed a blockbuster acquisition of 22,305 BTC for $2.13 billion. While this institutional maneuver appeared to help stabilize the floor, the reprieve was short-lived. Market sentiment turned toxic as the geopolitical theater intensified; President Trump escalated his war of words with Emmanuel Macron, dangling a 200% punitive tariff over the French wine industry. The move seemed a direct reprisal for Macron’s public snub of Trump’s nascent ‘Board of Peace,’ a Gaza peace initiative.
Read more: Trump Tariff Shock Hits Global Markets as EU Mulls Retaliatory Action
Analysts remain divided. Some dismiss the spat as political theater reminiscent of Trump’s past reversals — Trump always chickens out (TACO) — while others warn the confrontation could spiral into a full-blown crisis. Reports of a major Danish pension fund preparing to dump U.S. Treasuries added fuel to the fire, raising fears of a domino effect across Europe’s vast holdings of American debt. According to Deutsche Bank, that debt is estimated at $8 trillion, more than half of total foreign ownership.
Economists sounded alarms over the potential fallout. Trump critic Peter Schiff argued the trade war could devastate U.S. consumers already struggling with affordability.
“Trump has finally given the world the motivation to do what it should have done decades ago,” Schiff wrote on X. “If Americans think there’s an affordability crisis now, wait until they see what happens when the world pulls the rug on the U.S. dollar.”
At the time of writing, bitcoin was still trending downwards, hovering near $88,000 — levels last seen Jan. 1. Meanwhile, the Jan. 20 downturn triggered $226.5 million in long liquidations against just $9 million in shorts, wiping out nearly $700 million in leveraged bets. The broader crypto economy shrank 3.7% to $3.11 trillion, highlighting how quickly geopolitical shocks can reverberate across digital assets.
Bitcoin’s technical profile has shifted to a bearish/strong sell posture in the short term. Price action is seen as largely being dictated by the geopolitical fallout between the U.S. and Europe. The cryptocurrency’s 14-day relative strength index ( RSI) has dropped sharply, with readings reported between 25.9 and 29.2. This signifies that bitcoin may be entering oversold territory, though downward momentum remains strong.
BTC/USD 1-hour chart via Bitstamp on Jan. 20, 2026.
The daily chart shows a clear bearish crossover, with the moving average convergence divergence ( MACD) line currently at -658.7, trending well below the signal line with a growing negative histogram. While long-term holders point to the RSI being oversold as a potential “dip-buying” opportunity, the immediate outlook is bearish as long as the price remains below $94,000.
- Why did Bitcoin fall below $90K? Geopolitical tensions from Trump’s 10% tariff threat on Europe rattled investor sentiment.
- Which regions felt the impact most? Europe faced tariff fears, while Asia saw market volatility and China steadied on GDP data.
- What role did Strategy play? Strategy’s $2.13B purchase of 22,305 BTC briefly cushioned the downturn before sentiment soured.
- What’s the outlook for crypto markets? Bitcoin remains bearish near $88K, with $700M in liquidations and a 3.7% market cap drop.
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