4 min readBitcoin has fallen below the key 90k level but is showing signs of steadying as investors await Trump’s speech at Davos. The largest cryptocurrency trades down 2% over the past 24 hours to 89.2k and trades 6% lower this week. The selloff has been seen across the crypto space, with the total crypto market capitalisation falling 2.1% to $3.1 trillion.
The selloff in Bitcoin and the broader crypto market has been fueled by heightened concerns over President Trump’s demands for Greenland. Over the weekend, Trump threatened 10% tariffs on 8 European countries as of February 1st, with these tariffs rising to 25% in June if a deal to acquire Greenland hadn’t been agreed.
Trump’s revival of trade tariff rhetoric and fears of retaliation from the EU, are putting the two sides at risk of an all-out trade war, hitting risk sentiment and spurring capital preservation, whilst also fueling a sell-America trade. The USD, US stocks, and US Treasuries fell sharply yesterday as investors pulled capital out of the US.
Meanwhile, safe havens such as gold and silver have risen to fresh record highs above $4880 and $95, respectively. This shows that investors continue to lean towards defensive.
Today, the mood has steadied, US futures are modestly higher, as is the USD, and the selloff in crypto appears to have found a floor, at least for now. All eyes are on Trump’s speech at the World Economic Forum in Davos, keeping macro factors firmly in focus.
Trump will make his first visit to the WEF since 2020 and will deliver a special address at 1:30 GMT. He will also meet with European leaders as he continues his push for US control of Greenland.
Trump has shown few signs of softening his stance. Although on Tuesday, he said he wanted to secure a deal that would make America’s NATO allies very happy. However, when probed about how far he would go to take over Greenland, he said, “You’ll find out”.
Investors are hoping that he may strike a more reconciliatory tone in today’s speech. If so, this could help risk assets such as Bitcoin and stocks stage a recovery. However, should Trump press ahead with trade tariffs, risk-off will persist, bringing $ 5,000 into focus for Gold and setting risk assets on the next leg lower below key support levels.
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