Introduction
Geopolitical tensions between the United States and the European Union over Greenland triggered a week of significant volatility across cryptocurrency markets. Bitcoin, the leading digital asset, lost its crucial $90,000 support level, registering a 6.5% weekly decline despite President Donald Trump later softening his stance on annexation threats. The sell-off was broad-based, with major altcoins like Ethereum and Solana falling sharply as investors sought safety in traditional assets like gold, which soared to record highs.
Key Points
- Geopolitical tension over Greenland triggered a 6.5% weekly decline in Bitcoin, with the cryptocurrency losing its $90,000 support level despite Trump's softened stance.
- While Bitcoin declined moderately, several altcoins suffered more severe losses, with Monero (XMR) plunging almost 30% and other major assets like Ethereum dropping 11%.
- Despite market volatility, MicroStrategy continued its Bitcoin accumulation strategy with a $2.1 billion purchase of 22,305 BTC, highlighting institutional confidence during uncertain times.
Geopolitical Spark Ignites Market Turbulence
The volatility began last weekend when eight EU countries deployed troops to Greenland for a reconnaissance mission, a direct response to President Trump’s repeated remarks that the US should annex the strategic island. The US President retaliated by threatening to impose a new set of 10% tariffs on those nations starting February 1 if they did not withdraw. The EU scheduled an emergency meeting, with reports suggesting the bloc was prepared to deploy a severe, never-before-used ‘trade bazooka.’ This escalating standoff created immediate uncertainty, which cryptocurrency markets, known for their sensitivity to macro risks, absorbed rapidly.
Bitcoin, which had traded calmly above $95,000 over the weekend, broke down swiftly as Asian and futures markets opened on Monday. The price quickly fell through $92,000 and then below the key $90,000 level. The decline accelerated, with BTC dipping under $88,000 by Wednesday morning. A brief rally to $90,300 occurred after Trump stated during a speech at Davos that he would not use force to take over Greenland. However, this recovery proved to be a ‘fake-out,’ as the price quickly dumped to a multi-week low of $87,200. Volatility persisted, with another challenge at $90,000 materializing only after Trump canceled the threatened tariffs, hinting at a potential deal. As of the latest data, no details of such a deal have emerged, and Bitcoin has failed to reclaim $90,000, trading around $89,200.
A Broad Market Retreat and Divergent Performances
The sell-off was not confined to Bitcoin. The broader cryptocurrency market experienced substantial declines, with many altcoins suffering more severe losses. Ethereum (ETH), Solana (SOL), and Chainlink (LINK) each dropped by approximately 11%. The downturn was even more pronounced for assets like SUI and HYPE, which fell around 15%, while privacy-focused Monero (XMR) plunged by almost 30%. This highlights the heightened risk-off sentiment that typically impacts smaller-cap and more speculative assets the hardest during periods of geopolitical stress.
In stark contrast, a handful of assets defied the negative trend. Cryptocurrencies identified as CC, PAXG (a gold-backed token), and RAIN were reported to be ‘well in the green,’ suggesting capital rotation into perceived safe havens or niche sectors. This divergence underscores the fragmented nature of the crypto market during crises. Overall, the total cryptocurrency market capitalization stood at $3.1 trillion with a 24-hour trading volume of $110 billion. Bitcoin’s market dominance remained robust at 57.5%, indicating it weathered the storm slightly better than the altcoin complex on a relative basis.
Broader Context: Gold, Institutions, and Enduring Narratives
The crypto market turmoil unfolded against a backdrop where traditional safe-haven assets thrived. Gold skyrocketed to consecutive all-time highs, nearing the historic $5,000 per ounce mark. This inverse performance between Bitcoin and gold challenged the narrative of Bitcoin as ‘digital gold’ during this specific episode, though long-term comparisons tell a different story. Notably, despite the price struggle and geopolitical tension, institutional accumulation continued unabated. MicroStrategy, led by Michael Saylor, announced its latest purchase of 22,305 Bitcoin for over $2.1 billion, a powerful signal of long-term conviction.
Other major headlines framed the week’s events. Spot XRP ETFs saw their largest single-day outflows to date, with over $50 million leaving the funds, coinciding with Ripple’s price decline. Ethereum co-founder Vitalik Buterin announced his plan to leave centralized social media by 2026. Market commentary also featured familiar debates; gold advocate Peter Schiff labeled Bitcoin the worst-performing Wall Street asset, a claim promptly rebutted by analyst Nate Geraci, who noted Bitcoin had gained over 90% since the launch of spot ETFs two years prior—outpacing the S&P 500. This week also marked one year since President Trump’s second inauguration, a period review of which showed Bitcoin down 15% and many altcoins crushed 70-90%, a surprising outcome given his self-proclaimed title of ‘crypto president.’
📎 Related coverage from: cryptopotato.com
