🌐# US-EU Tariff Tensions Shake Crypto Markets

January 21, 2026 – The cryptocurrency market faced its most severe “bloodbath” of the year today. Bitcoin (BTC) plunged 4.5%, falling from an intraday high of $92,869.5 to a support level of $87,800, and finally closing at $88,800—marking the largest single-day decline since October 10, 2022. Ethereum (ETH) suffered even more, dropping 7%, breaking the critical $3,000 psychological level, and hitting a low of $2,918.
Over $1.37 billion worth of contracts were liquidated across the network within 24 hours, impacting 180,000 investors, with long positions accounting for over 90% of liquidations.
This avalanche-like decline was not isolated. Amid turbulence in global bond markets, escalating geopolitical conflicts, and a sharp US stock market sell-off, the perception of cryptocurrencies as a “safe haven” has been shattered. Panic spread rapidly across every trading segment.
⚡ Market Dynamics
Data shows that ETH fell more sharply than BTC due to both linkage effects and short-term ecosystem weakness, while trading volumes for both assets surged simultaneously, indicating concentrated market selling pressure. Short-term volatility is expected to continue.
🔹 Root Causes of the Crash
1. Macro Storm Hits: Risk Assets Retreat
The correction was triggered by a global domino effect:
Geopolitical tensions escalated as Trump threatened tariffs on eight European countries and made extreme remarks regarding Greenland, prompting Canada to simulate a US military invasion for the first time.
The global bond market experienced historic sell-offs: Japanese yields entered the “4% era,” and the 40-year Treasury yield rose 27 basis points to 4.215%, while the 10-year US Treasury yield climbed to 4.293%.
Investors fled high-beta assets, moving into traditional safe havens like gold and silver (gold surged ~2% intraday to $4,762; silver +6.71%). Bitcoin’s narrative as “digital gold” failed, turning it into a sell target.
US equities suffered a steep decline: the S&P 500 erased all gains for 2026, and the Nasdaq dropped 2.39%, dragging cryptocurrencies down due to long-standing correlations.
Concerns about Federal Reserve tightening further amplified fears of liquidity contraction, adding to selling pressure.
2. Leading Coins Under Pressure: Diverging Selling Sources
Bitcoin: Miner capitulation is evident. The BTC hash rate has declined for 60 consecutive days, with the hash ribbon indicator inverted. Inefficient miners are selling to sustain operations, adding selling pressure. Although mining difficulty will drop ~4% on January 22, short-term pressure remains.
Ethereum: ETH declines were driven by linkage to BTC + ecosystem weakness.
BTC’s drop and the breach of $3,000 triggered mass liquidation of leveraged long positions.
Ethereum’s Layer 2 ecosystem activity and on-chain transactions are declining. DeFi lock-up volumes fell alongside prices, and there’s no immediate new narrative to support ETH growth.
Overall, market risk aversion is extreme, invalidating the usual “BTC rises → altcoins follow” pattern. Funds concentrated in top assets, while most altcoins fell far more sharply.
3. Leverage Frenzy Ends: Panic Liquidations
High leverage amplified the crash. In 24 hours, 180,000 traders were liquidated, mostly long positions, creating a vicious cycle of selling. Retail investors fled, while institutional investors continued holding top assets like BTC and ETH ETFs, even increasing strategic reserves.
📊 Technical Outlook
Bitcoin (BTC) – Range-Bound and Bearish
Daily chart: Below 5-day and 10-day moving averages; MACD death cross indicates continued bearish momentum.
Short-term support: $87,800. If broken, next target: $85,000, with extreme risk of $82,000–$83,000.
Resistance: $90,000 and previous consolidation near $93,000. Rebound requires high-volume breakout.
Ethereum (ETH) – Breakdown Continues
Daily chart: Below 5-day, 10-day, and 20-day moving averages, clearly bearish.
Immediate support: $2,918; key support: $2,800. If lost, next zone: $2,700–$2,750.
Resistance: $3,000 and previous consolidation near $3,100, requiring volume breakout to ease downward pressure.
Summary:
The January 21 crash reflects a perfect storm of macro uncertainty, leading coin selling pressure, and leveraged panic liquidations. Short-term volatility remains high, and both BTC and ETH are showing significant bearish signals. Investors should closely watch key support and resistance levels, as the next movements will determine the market’s short-term direction.