Bitcoin moved lower after Donald Trump threatened new tariffs on eight European countries, a development that hit global markets while U.S. exchanges remained closed for the holiday. With American trading desks offline, overseas investors reacted first, and digital assets followed broader risk markets lower.

This reaction came amid concerns that trade disputes may disrupt financial flows beyond tariffs themselves. European investors hold an estimated $8 trillion in U.S. bonds and equities, according to figures cited by Bloomberg. That exposure has kept markets sensitive to any shift in cross-border capital.

A recent report referenced warnings from Deutsche Bank, which cautioned that sudden reallocations could unsettle markets more severely than tariff costs. The bank described the risk as a “weaponization of capital,” pointing to financial leverage as a growing factor in trade disputes.

Markets Turn Defensive as Europe Braces for Tariffs

Trump said the proposed tariffs would target eight European countries, including Denmark, Norway, and France. He linked the move to U.S. national security interests tied to Greenland, a long-standing point of contention.

The proposal indicates that a 10% tariff will come into effect in February. In case these talks collapse, the rate will be increased to 25% in June. The announcement made by European leadership was branded as a forewarning that could raise the stakes in trade wars.

Investors resorted to the conventional safe havens when the market perceived the situation as riskier. Switzerland's currency was on the verge of setting a record against the yen and increased in value relative to the euro to its highest point in two months. Gold saw a sharp increase in price, with the spot price reaching an incredible $4,658.82 per troy ounce.

Bitcoin Faces Technical Pressure Amid Macro Uncertainty

Besides the macro backdrop, veteran trader Peter Brandt warned that Bitcoin could see further downside. He projected a potential move toward the $58,000 to $62,000 range from levels near $92,400, implying a decline of roughly 33% to 37%.

Brandt shared the outlook on X, pointing to a rising wedge pattern that developed over the past two months. The structure shows prices compressing between two upward-sloping trendlines. with momentum fading as the range tightens. Such formations often precede declines, though outcomes remain uncertain.

Similar dangers have been pointed out by other market analysts as well. One of the analysts stated that the current situation of Bitcoin is similar to its 2022 market cycle, calling it very much within that period's price movements. On one hand, traders are closely watching whether there will be any reaction from European governments since the EU countries have already hinted at retaliating with tariffs. 

In addition to the trade news, a number of international events continue to garner attention. The Bank of Japan will make its policy decisions, China is going to publish its GDP report, and the economic data from the United States that are to come may change the market's anticipations regarding the Federal Reserve's actions. Leaders of different countries will be present at Davos, where trade and security matters, among them Greenland, are predicted to be the principal issues of the talks.

Read More: Bitcoin Price Slips Near $91,600 as Global Markets Turn Volatile

Conclusion: 

Bitcoin declined as Trump's tariff threats unsettled global markets during a U.S. holiday. European exposure to U.S. assets raised capital flow concerns. Investors moved into safe havens as gold and the Swiss franc surged, with analysts warning that trade tensions and technical signals could keep market volatility elevated.