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Take a 30-second survey to help improve The Block. Ethereum, and the broader cryptocurrency market experienced a sudden crash earlier today on fears that a potential trade war between the U.S. and the EU could further pressure the already fragile market sentiment.

According to The Block's bitcoin price page, the world's largest cryptocurrency dropped from $95,500 at 5 p.m. ET Sunday to $92,474 as of 9 p.m., a 3% decline in just a few hours. Other major cryptocurrencies, including ether, XRP, and Solana, tracked bitcoin's movement.

Due to the sudden drop, over $750 million in long positions was liquidated in the past four hours, according to Coinglass data aggregated from publicly available sources. Analysts attributed this plunge to fears of a looming tariff war between the U.S. and the EU. 

"The crypto market continues to show weakness relative to other asset classes," Min Jung, associate researcher at Presto Research, told The Block. "While U.S.-EU trade war concerns have had the largest impact on sentiment, other risk assets, including the KOSPI, are trading flat to higher. This suggests that crypto-specific weakness persists, with investors favoring other risk assets, a theme that has continued as most markets rally while crypto remains the laggard."

US v. EU

Renewed fears of a full-blown U.S.-EU trade war emerged after President Donald Trump threatened to escalate tariffs — starting at 10% on February 1 and rising to 25% by June — on imports from eight NATO allies (Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland) unless Denmark agrees to sell Greenland to the United States. 

The ultimatum drew sharp criticism from European leaders, who described the demands as "blackmail" and warned of a "dangerous downward spiral" in transatlantic relations, according to a Reuters report.

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EU officials are now preparing retaliatory measures, including potentially restricting all American services in Europe, imposing new taxes on U.S. companies, or limiting investments in EU.

"The latest U.S.-EU trade war headlines have certainly injected fresh volatility into an already uneasy market … adding a layer of geopolitical uncertainty that markets were in no shape to absorb," said Rachael Lucas, crypto analyst at BTC Markets. "But while the headlines are loud, they’re not the fundamental driver of the current pullback in crypto."

Lucas pointed out that crypto market sentiment had already been deteriorating after the U.S. crypto market structure bill stalled. After Coinbase withdrew its support for the bill, the Senate Banking Committee decided to postpone its markup hearing with a new date yet to be announced.

"Meanwhile, Bitcoin has spent months consolidating after its October 2025 all time high near $126,000, with traders steadily taking profit after an extended period of volatility," Lucas said. "The recent break below the 50 week moving average triggered algorithmic selling, at the same time Spot Bitcoin ETFs shed $4.4 billion through November and December and futures open interest fell sharply, all signaling reduced appetite for risk."

The BTC Markets analyst added that bitcoin may fall to the $67,000 to $74,000 region if these macro pressures persist. Still, Lucas said that this does not resemble past crypto winters, noting that the entire industry is more mature with constructive regulatory signals.