Total market capitalization is down 4% on the day as markets have shed more than $200 billion since the weekend. Bitcoin has led the losses, falling briefly below $88,000 during early trading in Asia on Wednesday morning, but it appears America is leading the sell-off.
BTC has now lost 10% in just seven days as it falls back to support levels. However, zooming out shows that it remains within a two-month range-bound channel and continues to consolidate.
Major volatility was predicted for Tuesday following a public holiday in the US on Monday, as markets digest President Trump’s latest round of tariff threats on Europe.
“The cryptocurrency market crashed on January 21, primarily due to broad risk-off sentiment from President Trump’s renewed 10–25% tariff threats on European/NATO countries over the Greenland dispute, amplified by a sharp Japanese government bond sell-off,” said Andri Fauzan Adziima, research lead at Bitrue.
Tariffs, Japanese Bonds, and Geopolitics
Trump’s trade war is not the only thing impacting crypto markets today.
“Much of today’s market upheaval stems from Japan,” said Head of Investment Strategy at SoFi, Liz Thomas.
Head of Commodity Strategy at Saxo Bank, Ole Hansen, explained that “The relentless surge in long-dated JGB [Japanese government bond] yields signals that one of the world’s most reliable liquidity backstops is fading, with consequences that extend well beyond Tokyo.”
Pressure on global liquidity impacts risk-on assets such as crypto and tech stocks first, while safe-haven assets such as gold and commodities benefit.
MF Fund founder Michaël van de Poppe said if gold continues to gain, there’s “max panic taking place on the markets, as people run into risk-off assets.”
#Bitcoin vs. Gold is breaking down.
The current valuation of #Bitcoin hasn’t been this low vs. Gold ever before.
It’s similar to the periods of 2022 and 2018, the bottoming periods of those times.
Gold keeps accelerating upwards, the more it goes vertical, the faster we get… pic.twitter.com/GpnlFzC8M8
— Michaël van de Poppe (@CryptoMichNL) January 20, 2026
Elsewhere on Crypto Markets
The broader crypto market is a bloodbath today, with Ether dumping 7% in a fall below $3,000 again, hitting $2,925 and returning to December lows.
There were also substantial losses for Binance Coin, Monero, and Hyperliquid, but most altcoins were down 3-4% on the day. Canton (CC) was bucking the trend with a 12% gain on the day.
Total market cap had fallen to the lower bounds of its sideways channel at $3.08 trillion at the time of writing. It needs to hold key support here to avoid falling into a full bear market and prolonged crypto winter.
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