Bitcoin’s Wild Ride: Tariffs and Liquidations Shake Up the Crypto World!

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Ah, the saga of Bitcoin! Just when it seemed poised for glory on the wings of ETF enthusiasm, along came the tariffs to rain on this digital parade, sending prices spiraling like a flailing kite in a storm.

Behold! Bitcoin has sailed beyond the illustrious $95,000 mark for the first time since November, propelled by not just strong winds of spot ETF inflows but also a sprinkle of easing inflation data. The fervor was palpable as BTC flirted with the tantalizing $98,000 threshold, only to be rudely interrupted by U.S. tariff news that flipped the market’s mood faster than a pancake on a Sunday morning. In mere hours, the price careened down to the $92,000 range, taking leveraged positions along for the chaotic ride.

Bitcoin Breaks Free from $95K Chains Thanks to ETF Enthusiasm!

Last week, our dear Bitcoin surged like a jubilant dancer breaking free from a two-month-long confinement. Thanks to the insatiable appetite for spot Bitcoin ETFs, which saw a resurgence after a rather sluggish start, the buying frenzy propelled Bitcoin to heights unseen in recent times. Picture this: Tuesday alone raked in about $760 million in net inflows, pushing weekly totals to an eye-popping $1.4 billion. Now that’s what I call a party!

The economic backdrop offered a cozy blanket for this rally, as fresh inflation data revealed a slowdown-Core CPI eased to a mere 2.6% year-on-year, the lowest since early 2021. Traders, weary from weeks of underperformance, flocked back to hard assets, and lo! Bitcoin welcomed them with open arms.

Image Source: X/Wintermute

With a triumphant leap, BTC broke above the $95,000 ceiling that had been a stubborn barrier since November. For a fleeting moment, it even grazed levels near that tantalizing $98,000. Unlike previous booms driven by mere whimsy, this particular ascent had the solid backing of inflows-talk about a credible breakout!

Geopolitical Shenanigans Spark $850M Liquidation Frenzy

But wait! Just as everyone was settling into their seats, along came Monday with its gloomy geopolitical clouds. Market confidence took a nosedive as President Trump unleashed a fresh wave of tariffs-starting at 10% on imports from eight European nations over some Greenland-related squabbles. And there are whispers of raising those tariffs to a whopping 25% by June. Talk about bringing a spoon to a knife fight!

In response, the European Union steeled itself with plans for up to €93 billion in retaliatory measures while tensions with Iran continued to simmer like a pot left on the stove.

The market, feeling the heat, shifted sharply as investors priced in this growing uncertainty. Crypto, ever the dramatic participant, followed suit, and Bitcoin fell from its weekend highs back toward $92,000, triggering a staggering $850 million in long liquidations in the blink of an eye. Almost half of those losses came from Bitcoin and Ethereum positions-oh, the humanity! The speed of this descent showed that leverage had indeed returned to the arena after a spell of caution.

Yet, despite the swift plunge, the sell-off remained contained, and Bitcoin found support above $90,000, with selling pressure dwindling without spiraling into utter chaos. A small victory in the grand scheme, wouldn’t you say?

CLARITY Act Hits a Snag While Interest in Tokenization Rises

Meanwhile, back in the realm of policy and institutional shenanigans, several developments influenced the broader market narrative. Progress on the CLARITY Act hit a snag, thanks to a spat between Coinbase and the White House over stablecoin yield provisions. Delays? Oh, we love those! They lower expectations for any kind of clarity on federal crypto regulations.

However, the interest from major financial institutions remains unyielding. Goldman Sachs is busily working away on tokenization and stablecoin systems, while in Asia, South Korea has approved amendments establishing a legal framework for tokenized securities. Even the New York Stock Exchange is contemplating 24/7 trading through tokenized infrastructure. It seems like the world can’t get enough of these digital tokens!

Eyes Wide Open for Upcoming Events This Week

As we gaze into the crystal ball, market attention is shifting toward a busy global calendar that could shape near-term price action. With Tuesday marking the U.S. market’s reopening post-MLK holiday, all eyes will be on whether Bitcoin can maintain its recent lows.

Add to that the World Economic Forum, where Trump will grace Davos with his presence for the first time in six years. Will he offer pearls of wisdom on trade policy and foreign relations? Only time will tell, but markets will surely be hanging on his every word.

Later in the week, an EU emergency summit on Thursday is expected to tackle the proposed tariffs. The markets are on high alert for any signs of either escalation or compromise. And don’t forget Friday’s Core PCE report-the Federal Reserve’s favorite inflation gauge-which will set the stage ahead of the FOMC meeting in February.

Amidst all this, a pending Supreme Court ruling on tariff authority looms large like a thundercloud, threatening to add more volatility to the already choppy waters of global markets. For now, Bitcoin’s ability to cling to the low $90,000 range stands as the pivotal test. Holding firm alongside continued ETF inflows would keep the recent breakout intact, but a drop below $90,000 might just send prices tumbling back into the murky depths of November, delaying any further ascent.

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2026-01-21 00:31