Due to market concerns that Europe and the United States may erupt into a trade war, which would further impact the already fragile market sentiment, Bitcoin, Ethereum, and the entire cryptocurrency market experienced a sharp decline earlier today.

Data shows that the price of Bitcoin dropped from $95,500 at 5 PM Eastern Time on Sunday to $92,474 by 9 PM that evening, with a decline of 3% within just a few hours. Other mainstream cryptocurrencies such as Ethereum, Ripple (XRP), and Solana also followed Bitcoin's downward trend.

Cryptocurrency data analysis platform Coinglass compiled public data showing that as a result of this sharp decline, the liquidation of long positions in the cryptocurrency market exceeded $750 million in the past four hours. Analysts believe that the trigger for this decline is the market's concern that a trade war between Europe and the United States is imminent.

"Compared to other asset classes, the weakness in the cryptocurrency market continues to persist," said Min Jung, an assistant researcher at Presto Research Institute. "Although concerns about the trade war between Europe and the United States have the most significant impact on market sentiment, other risk assets such as the Korea Composite Stock Price Index (KOSPI) have remained flat or even risen. This indicates that the downturn in the cryptocurrency market is unique, as investors are turning to other risk assets—a trend that has continued even as most markets generally rebound, with cryptocurrencies still lagging behind."

Renewed US-Europe trade disputes

Previously, Trump issued a threat, demanding that Denmark sell Greenland to the United States, or else tariffs would be imposed on imports from eight NATO allies (Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, Finland)—the tariffs would initially be set at 10% starting February 1, gradually increasing to 25% by June. This move has reignited market concerns about a full-blown trade war between Europe and the United States.

Reports indicate that this ultimatum has been strongly criticized by leaders of several European countries, who labeled the US demands as "extortion" and warned that such actions would lead to a "dangerous vicious cycle" in transatlantic relations.