Analysis: Tariff news triggers $850 million in long liquidations in the crypto market on Monday, but considered a healthy correction

PANews, January 20 – According to Wintermute market analysis, bitcoin recently broke through the $95,000 resistance level and briefly touched $98,000, driven by strong ETF inflows and moderate inflation data. However, on Monday, news of Trump imposing tariffs on Europe triggered $850 million in long liquidations, causing the price to quickly fall back to around $92,000. This rally was mainly driven by three factors: significant ETF capital inflows (with a single-day net inflow of $760 million last Tuesday and $1.4 billion for the whole week), supportive inflation data (core CPI rose 2.6% year-on-year, the lowest since March 2021), and bitcoin’s catch-up trade against hard assets such as gold. However, on Monday, Trump’s announcement of tariffs on eight European countries put pressure on risk assets across the board, leading to a rapid correction in the crypto market. The report believes that although the liquidations were intense, leverage was quickly cleared without triggering a market spiral, making it a healthy adjustment.

Looking ahead to this week, the market’s focus will be on the Davos Forum, the EU emergency summit, and the core PCE data to be released on Friday. If bitcoin can hold above $90,000 and ETF inflows remain positive, the breakout trend will remain valid; if it falls below this level, it may return to the consolidation range seen since last November. The report believes that current buying interest remains solid, with the key being whether the tariff threat will turn into actual policy. At present, the market tends to view it as “political noise.”