Crypto markets witnessed significant turbulence within a 24-hour period, with over $864 million liquidated. This volatility affected more than 241,000 traders, with a predominant impact on long positions, which accounted for about $782 million of total liquidations.
As reported by CoinGlass, Bitcoin saw a sharp decline from above $95,000 to just under $92,000, resulting in liquidation losses of approximately $229 million. Ethereum was also heavily affected, experiencing $153 million in liquidations. Notably, the largest single liquidation occurred with a BTC-USDT position totaling $25.8 million on the Hyperliquid exchange.
What factors contributed to this market volatility? Traders faced heightened anxiety due to geopolitical tensions, particularly stemming from President Trump's proposal of tariffs on Denmark and key European allies related to the Greenland issue. The proposed tariffs are set to begin at 10% in February and could escalate to 25% by June if negotiations do not succeed. Trump contended that these nations have long benefitted from U.S. protection and emphasized that Greenland is vital for countering growing foreign influence and supporting the development of the missile defense system known as the "Golden Dome."
As a consequence, the overall cryptocurrency market capitalization fell nearly 3%, settling around $3.2 trillion according to CoinGecko. Investors have expressed concerns as the market continues to react to external political pressures, highlighting the importance of staying updated with global events that can impact financial markets.