Is a global tariff war triggering the sell-off?

Crypto prices crashed on Monday morning, with the total crypto market cap dropping 2.4% to $3.2 trillion as investor sentiment further deteriorated amid fresh tariff war concerns.

Bitcoin (BTC), the world’s largest crypto asset, dropped 3% to nearly $92,250 on Monday morning Asian time, before settling a little higher at $92,739 at press time. 

Ethereum (ETH) was down 3.1%, trading at $3,200, while other large-cap altcoins such as BNB (BNB), XRP (XRP), Solana (SOL), and Dogecoin (DOGE) posted losses between 3 and 8% in the past 24 hours. Some of the top laggards were Ondo (ONDO), Aster (ASTER), and Sui (SUI), marking losses of around 10% each.

Crypto prices fell as the crypto market experienced over $783 million worth of bullish bets being erased from the futures market over the last 24 hours. The majority of this came within the first 12 hours, according to data from CoinGlass.

Analysts believe the renewed volatility could have been triggered by investors rotating their capital into safer assets such as Gold and Silver after U.S. President Donald Trump threatened EU nations, including Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, with escalating tariffs starting at 10% from Feb. 1 should they oppose the annexation of Greenland into the American nation. These levies could reportedly escalate to 25% by June if no agreement is struck.

The European Commission and regional leaders, for their part, have called the move blackmail and countered with their own retaliatory measures against the U.S., including potential duties on 93 billion euros worth of American exports.

Geopolitical tensions of such nature tend to shake market sentiment, often triggering long-lasting selloffs. Recall that previously, a separate escalation of U.S.-China tariff hostilities that began in October last year led investors to flee from risky assets en masse. At the time, Bitcoin fell nearly 25% by late 2025 before stabilizing. At the same time, the global market cap had fallen nearly 32% to $2.96 trillion by late December.

While today’s selloff has been mild in comparison to the one seen during the U.S.-China tariff war, history tells us long, lingering disputes with no resolution could drive further panic in the crypto market. 

Uncertainty around crypto regulations

At the same time, progress around a key crypto regulation in the U.S. has stalled, which could further exacerbate losses.

A key crypto market structure bill hit a roadblock last week after the Senate Banking Committee postponed its scheduled markup of the CLARITY Act. The delay follows a sharp withdrawal of support from industry leaders like Coinbase CEO Brian Armstrong. Consequently, the hearing has been moved to a new date that is yet to be announced.

Market sentiment has also taken a hit from questions raised by the U.S. Supreme Court justices on the legality of the nature of President Trump’s highly controversial tariffs, which now await a final ruling from the nation’s highest court.

At press time, the Crypto Fear and Greed Index, which acts as a gauge of market emotion, has dropped to 44 over the past 24 hours, down 5 points and into the fear territory.

Bitcoin loses a key support

Bitcoin price has fallen below $95,000, a psychological support level that bulls were leaning on for further upside. 

As previously reported by crypto.news, breaking below this area has moved it closer to another key trendline support at $90,334 that had been acting as a vital base for the asset.

Looking ahead, Bitcoin and the crypto market in general could also lack the support of Federal Reserve rate cuts, as well, which have historically been beneficial for risk assets. 

Analysts at J.P. Morgan expect the Fed to keep interest rates steady through 2026.