The crypto market lost over $100 billion in value in 24 hours on Monday, following the escalation of trade tensions and the dwindling hopes of interest rate cuts.
This led to the decline of Bitcoin and all other major cryptocurrencies, resulting in the total market cap falling from $3.33 trillion to $3.22 trillion.
This fall has Global investors, thereby worsening the losses in leveraged funds as the industry is still recovering from the market volatility of the latter part of 2025.
Major Tokens Drive Sharp Declines
Bitcoin weakened by 3.6 percent to below $92,000, reversing the previous week’s gain.
Ethereum decreased by 4.9 percent to below $3,200, while Solana shed 8.6 percent.
Other altcoins, including Avalanche and Polygon, weakened by even sharper percentages in a trend that saw a rotation out of risk assets.
Meme coins registered double-digit drops, while the thin liquidity condition accelerated the fall in the retail-driven areas.
Liquidations Compound Market Pressure
The price plunge led to $680 million worth of liquidations, according to data provided by CoinGlass, with $600 million of those being long positions.
The ripple effect pushed the market further downward.
Leverage that had accumulated in the past weeks means that traders were caught off guard as sentiment changed.
Trade Tensions and Macro Pressures Fuel Drop
U.S. tariff threats on European countries, while linked to Greenland negotiations, stirred risk aversion.
President Donald Trump’s idea of 10 percent to 25 percent duties on imports from Denmark, Germany and others added to uncertainty.
Stronger economic data lowered expectations of Federal Reserve rate cuts, and strengthened the U.S. dollar’s position to pressure speculative assets.
“The market had priced in the possibility of EU retaliation worth as much as $100 billion,” said Yahoo Finance analyst Akiyama Felix.
Regulatory debates in the U.S. and Europe on oversight and compliance weighed further on institutional sentiment.
Key Support Levels Under Scrutiny
Bitcoin has tested support at levels just above $92,000, which is considered a critical support area by analysts.
A breach of this could result in a target of sub-$90,000 levels.
Failure to maintain levels above key medium-term moving averages could result
For some, the correction serves as a welcome respite after several months of consistent advancement, amidst a growing accumulation by long-term investors.
Divided Views on Recovery Path
Short-term bearish sentiment, but long-term bulls are encouraged by institutional adoption and upgrades to their protocols.
Those taking a bearish position emphasize macro headwinds and regulatory risks.
The market is awaiting clarity on tariffs as of Feb. 1 and the next Federal Reserve meeting scheduled for Jan. 28-29.
Regulations related to stablecoins under the GENIUS Act will come into effect as of Jan. 18, 2027.
Market players are preparing for just that as these dynamics develop.
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