Bitcoin Drops Below $90K Amid Escalating EU-US Tensions Over Greenland

This week has been tumultuous for both global politics and the cryptocurrency market, with Bitcoin feeling the brunt of it. The volatility began last weekend after eight EU countries sent troops to Greenland as part of a reconnaissance mission, following President Trump’s bold remarks about the US needing to annex the island. In response, Trump threatened to impose a 10% tariff on these nations starting February 1 unless they withdrew their forces and allowed negotiations to proceed.

The European Union quickly scheduled an emergency meeting, with some reports suggesting that the bloc was prepared to unleash a “trade bazooka” never before used. As tensions mounted, Bitcoin’s price, which had been trading above $95,000 over the weekend, began to falter. By Monday morning, after Asian markets opened, Bitcoin slid down to $92,000 and then swiftly fell below the critical $90,000 mark.

On Wednesday morning, the cryptocurrency dipped below $88,000. A brief rally ensued when Trump stated at his Davos speech he would not use force in Greenland’s takeover. But this optimism was short-lived; Bitcoin tumbled again to $87,200 shortly after. The erratic price movements continued with another attempt at breaching $90,000 when Trump hinted at canceling the tariffs against the EU pending a potential agreement. As of now, no clear details of such an agreement have emerged.

Currently trading around $89,200, Bitcoin has not been able to reclaim its $90K support level. This represents a 6.5% decline over the past week—a comparatively modest drop next to other cryptocurrencies like ETH and SOL which suffered around an 11% loss each. Meanwhile, XMR has seen a steep decline of nearly 30%. Some assets like CC and PAXG bucked the trend and ended well in the green.

In market data highlights: The total crypto market capitalization stands at approximately $3.1 trillion with a 24-hour volume near $110 billion. Bitcoin maintains its dominance at around 57.5%, despite recent setbacks.

Here’s what changed: Gold has surged amidst Bitcoin’s struggles this week, reaching unprecedented highs nearing $5,000 per ounce for the first time ever—a stark contrast to BTC’s declines.

Meanwhile, XRP ETFs faced their largest outflows ever recorded as Ripple’s price stumbled once more on Tuesday; around $50 million exited these funds in a single day.

The week also marked one year since Donald Trump’s second inauguration as “crypto president.” During his tenure, while Bitcoin is down about 15%, altcoins have plunged between 70-90%, revealing stark contrasts in investor sentiment under his watch.

Ethereum co-founder Vitalik Buterin announced plans to transition fully away from centralized social media by 2026. All his posts this year have been disseminated through Firefly—a multi-client platform supporting networks like X and Lens.

Michael Saylor’s Strategy company continues to buy Bitcoin aggressively; they recently acquired over 22,305 BTC for roughly $2.1 billion despite geopolitical tensions and sluggish price trends.

In another highlight from this week: Nate Geraci rebuffed Peter Schiff’s criticism that Bitcoin is Wall Street’s worst performer by demonstrating that since ETF launches two years ago; Bitcoin has gained more than 90%.

As global political dynamics evolve further—particularly concerning US-EU relations over Greenland—the impact on cryptocurrencies remains palpable but uncertain until concrete resolutions materialize or markets settle into new patterns dictated by emerging realities.

The question now is whether Bitcoin will stabilize or face further turbulence amid ongoing geopolitical narratives shaping its trajectory this year.

On the trading front, the volatility has caught many investors off guard. The filing—late Friday—of new tariff threats by President Trump only exacerbated the uncertainty in the markets. Traders were already on edge with Bitcoin’s precarious position under $90,000. The timing matters. Just as traders thought they had a handle on the situation, Trump’s announcements at Davos threw another wrench into their assessments.

Adding to the complexity, major exchanges like Binance and Coinbase reported a surge in activity on January 22nd, as users rushed to either mitigate losses or capitalize on potential rebounds. According to Binance, trading volumes for Bitcoin spiked by nearly 30% compared to the previous week. This rush was partly fueled by speculative bets on whether Trump’s softer stance would translate into concrete diplomatic progress or if it was merely posturing.

Meanwhile, Ethereum’s decline of over 11% this week has raised eyebrows among analysts who note that its network upgrades and developments should ideally provide some price support. On January 21st, Ethereum co-creator Joseph Lubin remarked that the market’s reaction seems disconnected from the underlying technological advancements. “It’s perplexing,” Lubin said during an interview with Bloomberg, “but it reflects current investor sentiment rather than fundamentals.”

As for altcoins like Solana and Chainlink, which saw double-digit percentage drops, there are questions about their resilience in such volatile conditions. Solana Labs CEO Anatoly Yakovenko noted on January 20th that while short-term price swings are concerning, their focus remains steadfast on long-term growth and ecosystem development. However, with such pronounced weekly declines, investors remain cautious about further downside risks in the near term.