Would a global tariff war trigger the sell-off?

Crypto prices collapsed Monday morning, with the total crypto market cap falling 2.4% to $3.2 trillion, as investor confidence further deteriorated amid renewed tariff war concerns.

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

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

Crypto prices fell as the crypto market saw over $783 million in bullish bets wiped from the futures market in the past 24 hours. The majority of these incidents occurred within the first 12 hours, according to CoinGlass data.

Analysts believe the renewed volatility could have been triggered by investors turning their capital to safer assets such as gold and silver after US President Donald Trump threatened EU countries including Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland with an increase in tariffs from 10% from February 1 if they opposed the annexation from Greenland to the American nation. These levies could reach 25% by June if no agreement is reached.

The European Commission and regional leaders, for their part, called the move blackmail and responded with their own retaliatory measures against the United States, including potential tariffs on 93 billion euros of American exports.

Geopolitical tensions of this nature tend to shake market sentiment, often triggering long-lasting sell-offs. Recall that earlier, another escalation of tariff hostilities between the United States and China, which began in October last year, led investors to flee risky assets en masse. At the time, Bitcoin had fallen nearly 25% by the end of 2025 before stabilizing. At the same time, global stock market capitalization had fallen by almost 32%, to $2.96 trillion at the end of December.

Although today’s sell-off was light compared to that seen during the US-China tariff war, history tells us that long, lingering disputes without resolution could cause more panic in the crypto market.

Uncertainty around crypto regulations

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

A key crypto market structure bill hit a roadblock last week after the Senate Banking Committee postponed planned markup of the CLARITY Act. The delay follows an abrupt withdrawal of support from industry leaders like Coinbase CEO Brian Armstrong. Therefore, the hearing has been postponed to a new date which has not yet been announced.

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

As of press time, the Crypto Fear and Greed Index, which serves as a gauge of market emotion, has fallen to 44 in the past 24 hours, down 5 points and into fear territory.

Bitcoin Loses Key Support

Bitcoin price fell below $95,000, a psychological support level that bulls were relying on to continue their rise.

As previously reported by crypto.news, the move below this zone brought it closer to another key trendline support at $90,334 which provided a vital base for the asset.

Going forward, Bitcoin and the crypto market in general may also lack the support of Federal Reserve rate cuts, which have historically been beneficial for risky assets.

JP Morgan analysts expect the Fed to keep interest rates steady through 2026.