Trump's tariff threats, record highs in precious metals, and Bitcoin's flash crash: In-depth analysis of the subsequent impact.
TL;DR
On January 17, Trump announced escalating tariffs on eight NATO allies (10% from February 1, rising to 25% on June 1), triggering global market turmoil. Gold broke through $4,690/oz, silver hit a record high of $94/oz, and Bitcoin experienced a flash crash from $95,500 to $91,900 in the early hours of January 19 (a drop of 3.79%), with $554 million liquidated in 24 hours. In the short term : Tariff uncertainty is suppressing risk assets, precious metals and US Treasuries are attracting safe-haven funds, and the crypto market faces a liquidity crunch and a technical oversold rebound. In the medium to long term : If tariffs continue to push up inflation expectations (CPI may increase by 0.3-0.5%), it will strengthen the allocation logic of Bitcoin as "digital gold"; on-chain data shows that whales are continuously accumulating coins (accumulating 110,000 BTC in January) and exchange reserves have decreased by 30,000 BTC, supporting the bottom of the $91k-$93k range; however, there is a risk of $488 million long liquidation below $91k in the derivatives market, and a cascading decline should be anticipated. If the tariffs are overturned by the Supreme Court or an agreement is reached between the US and Europe, a recovery in risk appetite could drive BTC to rebound to the $95k-$97k range.
Core Analysis
Macroeconomic shocks from tariff threats
Trump's tariff policy goes beyond traditional trade protectionism, is deeply intertwined with the Greenland sovereignty dispute and Arctic geopolitical games, and targets core NATO allies, marking a structural shift in the transatlantic relationship between the US and Europe.
| Dimension | Specific impacts | Data support |
|---|---|---|
| Global trade | Supply chain restructuring intensifies, and import costs rise by 20%. | The effective tariff rate in the United States rose to 11.2% (the highest since 1943); the European Union is preparing retaliatory measures against $93 billion worth of US goods. |
| Inflationary pressures | Short-term commodity price transmission may lead to a 0.3-0.5% increase in core CPI. | The core PCE forecast for December 2026 is 2.1%, with the tariff effect appearing in the middle of the year and gradually fading away. |
| Economic growth | The IMF lowered its global growth forecast to 3.1% (from 3.3%), while the World Bank projected 2.6%. | The US manufacturing PMI contracted for the 10th consecutive month, resulting in a loss of 70,000 jobs. |
| US Dollar Trend | The dollar index fell 0.19% after the tariff announcement, weakening relative to safe-haven currencies. | The US dollar has fallen 7% from its December 2024 high, increasing the risk of de-dollarization. |
| Market sentiment | S&P 500 futures fell 0.7%, Nasdaq futures fell 1%, and European stocks were under pressure. | Treasury bond futures rose, corporate credit spreads widened, and risk premiums surged. |
Historical experience shows that during the 2018-2019 US-China trade war, similar tariff shocks led to a 0.45% drop in the S&P 500, a 10-12% increase in gold, but a mixed performance for Bitcoin (it rose 15% at times as a hedge, and fell at other times due to risk aversion). The uniqueness of the current situation lies in the fact that tariffs are being used as a geopolitical blackmail tool rather than a purely economic issue, which amplifies the uncertainty premium in the market.
Key milestones in the timeline :
- February 1 : The first batch of 10% tariffs takes effect; observe the EU's actual countermeasures.
- Q1 2026 : The US Supreme Court's ruling on IEEPA (International Emergency Economic Powers Act) may revoke tariff authorizations.
- June 1 : Without an agreement, tariffs could rise to 25%, potentially triggering a full-blown trade war.
The divergent performance of traditional safe-haven assets vs. cryptocurrencies
The record highs in gold and silver prices contrast sharply with the flash crash in Bitcoin, reflecting the market's repricing of the safe-haven attributes of different assets.
Precious metals performance :
- Gold : Reached a peak of $4,690.59/oz on January 19 (+1.7%), breaking previous highs consecutively.
- Silver : rose to $94.1213/oz (+3.9%), driven by both industrial and safe-haven attributes.
- Driving factors : Inflation expectations triggered by tariffs, a relatively weak dollar, and escalating geopolitical tensions.
Details of the Bitcoin flash crash :
- Time : Occurred after 00:00 UTC on January 19th
- In-depth : The price fell from a low of $95,500 to a low of $91,900 (a drop of 3.79%).
- Liquidation Scale : Total network liquidation $554M, of which long positions accounted for $536M (96%), and BTC liquidation accounted for $144M.
- Current status : Stable in the $92,700-$92,800 range, holding above the psychological threshold of $92k.
Reasons for asset differentiation :
- Liquidity differences : The crypto market trades 24/7 and reacts more violently to sudden news; the precious metals market is deeper and has a stronger ability to absorb safe-haven funds.
- Regulatory Perception : In an environment of uncertainty, institutions prioritize traditional safe-haven assets, while cryptocurrencies are still considered risk assets.
- Leverage Structure : High leverage in the crypto market (futures OI $60.6B) amplified the decline, triggering a liquidation cascade.
- Macro narrative shift : In the short term, the narrative of "digital gold" is giving way to "risk assets," but the long-term inflation hedging logic remains unchanged.
Comparison of community viewpoints: Crypto KOLs like Raoul Pal believe the flash crash was a "healthy pullback to cleanse leverage," predicting an imminent parabolic rise; while @TonyResearch_ emphasizes the long-term positive impact of Trump's exemption of taxes on small BTC transactions. Traditional analysts point out that gold's 5-year performance has surpassed Bitcoin, attracting allocation rotation.
Bitcoin Technical Analysis and Derivatives Market
Multi-timeframe technical indicators :
| Timeframe | RSI(14) | MACD | Key moving average positions | Signal |
|---|---|---|---|---|
| 1 hour | 18.48 (Significantly oversold) | -268.49 (Bearish) | Price below all moving averages | High probability of short-term rebound |
| 4 hours | 33.11 (Oversold) | -108.14 (Bearish) | Below EMA but above SMA (200) | Consolidation |
| Daily chart | 52.21 (Neutral) | +1,259.68 (Bullish) | Above EMA/SMA (50), below SMA (200) | The medium-term trend remains intact. |
Key support and resistance levels :
- Strong support : $91,000-$92,000 (liquidation cluster zone, $304M long position at $91,299)
- Key resistance levels : $95,000 (the biggest pain point for options, expiring on January 19th), $97,276 (upper Bollinger Band on the daily chart).
- Danger Zone : If the price falls below $91k, there is a $483M cumulative liquidation risk at $88,631, which could trigger a cascading effect.
Derivatives Market Situation :
- Futures open interest : $60.6 billion (down 1.53% in 24 hours), leverage ratio contracted.
- Funding rates : Bybit -0.003953%, Gate -0.0091% (negative rates are favorable for bulls), OKX +0.00185%
- Options Bias : March expiry: $478 million put options vs. $174 million call options; market expectations are bearish.
- Liquidation asymmetry : Long positions below $91k at $488M vs. short positions above $96,635 at $1.55B, with more concentrated downside risk.
Technically, the market presents a combination of "short-term oversold + medium-term resilience": the 1-hour/4-hour RSI is extremely oversold and the price has touched the lower Bollinger Band, with historical statistics showing a rebound probability of over 60%; however, the daily MACD remains in a bullish alignment, and the negative OBV divergence warrants caution. The current strategy should focus on whether $93,700 (lower Bollinger Band) can hold; a break above this level would target the $95k option expiration resistance.
On-chain data: Whale hoarding vs. short-term panic
Changes in exchange liquidity :
| date | Net outflow (BTC) | Exchange Reserves (BTC) | Signal |
|---|---|---|---|
| January 12 | -1,356 | 2,751,546 | A small outflow |
| January 13 | -6,213 | - | Accelerate outflow |
| January 14 | -18,696 | - | Large-scale hoarding of cryptocurrencies (before prices peak) |
| January 15 | -2,045 | - | Continuous outflow |
| January 18 | -2,020 | 2,721,275 | Net outflow even after flash crash |
| Cumulative changes | -30,271 | -30,271 | Strong signal to accumulate coins |
Whale and Institutional Movements :
- Large holders accumulating cryptocurrency : Addresses holding 1,000-10,000 BTC saw a net increase of 46,000 BTC in January, marking the first positive increase since November 2025.
- Mid-sized holders (10-1,000 BTC) (the "fish to shark" group) increased their holdings by 110,000 BTC in January, marking the largest monthly increase since the FTX crash in 2022.
- Retail investors followed suit : Addresses holding less than 1 BTC added over 13,000 BTC, the highest amount since November 2023.
- Institutional accumulation : US spot Bitcoin ETFs recently saw inflows of $750 million, bringing total holdings to 1.2 million BTC.
- Individual sell-off : An OG whale who has held the token for 12 years transferred 500 BTC ($47.77M) to an exchange on January 18th, but this was offset by ETF inflows.
On-chain sentiment indicators :
- MVRV ratio : 1.32 (January 17th), indicating an average unrealized earnings of 32%, similar to the level after the April 2024 ATH, which is in neutral territory.
- SOPR : 1.01 (January 17th), slightly above 1 indicates minor profit-taking, with no signs of panic selling.
- Stablecoin/BTC ratio : 0.27 (January 18th). This low ratio indicates a preference for holding BTC over stablecoins, a signal of risk appetite.
Conclusion : On-chain data reveals a clear split pattern of "smart money hoarding coins + short-term leveraged liquidations." The continuous decline in exchange reserves (a decrease of 30,000 BTC in 30 days), whales turning to net accumulation, and continuous inflows into institutional ETFs provide bottom support. However, excessive short-term leverage (96% liquidated to long positions) exposes vulnerability. Historically, similar combinations of on-chain accumulation and derivatives cleansing have often foreshadowed a medium-term bottom, but it takes 1-2 weeks to digest the panic.
Evolution of Community Sentiment and Market Expectations
Short-term sentiment (1-4 weeks) :
- Bearish camp : Tariff uncertainty is suppressing risk appetite; flash crash exposes market fragility; expected test of $88k-$91k support.
- Neutral view : Consolidation and digestion of oversold conditions, awaiting clarification of tariff policies and the expiration of February options ($95k, the biggest pain point).
- Bullish camp : Oversold rebound window, whale accumulation + negative funding rates create incentives to long, target $95k-$97k
Mid-term forecast (Q1-Q2 2026) :
- Optimistic Scenario (KOL Tom Lee et al.): If the tariffs are overturned by the Supreme Court or an agreement is reached, risk assets will rebound, with BTC targeting $180k-$200k and ETH $7k-$9k (30% probability).
- Neutral Scenario : Tariffs are implemented to a limited extent but without a full-blown trade war; inflation rises moderately; BTC fluctuates upwards to $110k-$120k (50% probability).
- Pessimistic scenario : Tariffs escalate to 25% + EU retaliates across the board, global recession fears rise, BTC falls below $80k (20% probability)
Altcoin Outlook :
- Bullish : Altcoin have been oversold relative to BTC for 4 years; MACD golden cross suggests a possible "altcoin season" in March; AI/RWA sector leads the gains (Ash Crypto view).
- Bearish : Liquidity constrained by BTC ETFs, VC coin selling pressure, a bull trap may form in May followed by a bear market in June (warned by multiple analysts).
Narrative shift : The community moved from optimism surrounding Trump's "crypto-friendly" stance in November, through pessimism following his inauguration in December, to a conditional bullish sentiment in January based on the assumption that "tariff removal = positive." Overall, long-term "digital gold" believers (such as Michael Saylor) viewed the flash crash as a "purification of faith," while short-term traders awaited clearer macroeconomic signals.
in conclusion
Trump's tariff threats are reshaping the global macroeconomic landscape, triggering a short-term divergence between traditional safe-haven assets and cryptocurrencies: gold and silver hit record highs to absorb safe-haven funds, while Bitcoin, due to its high leverage and risk asset attributes, plummeted to $91,900. The subsequent impact will focus on three main dimensions :
1. Macroeconomic Level : If tariffs continue to push up inflation (CPI +0.3-0.5%), it will strengthen the long-term allocation logic of Bitcoin as a hedge against fiat currency depreciation. However, in the short term (1-2 months), uncertainty will suppress risk appetite. The Supreme Court ruling in February and the progress of negotiations between Europe and the United States are key variables.
2. Technology and On-Chain : Bitcoin found support in the $91k-$93k range through on-chain accumulation (exchange reserves decreased by 30,000 BTC, whales increased their holdings by 110,000 BTC), but the derivatives market faces a $488M liquidation risk below $91k. Technically, the probability of an oversold rebound is high. If the $93.7k support holds, it could challenge $95k-$97k; if it breaks down, a cascading drop towards $88k should be anticipated.
3. Market Sentiment : Short-term divergence within the crypto community has increased, but the long-term consensus on "digital gold" remains unshaken. Altcoin face greater volatility; attention should be paid to rotation opportunities after BTC stabilizes. Institutional investors' continued accumulation through ETFs (recent inflow of $750 million) indicates professional funds are adopting a contrarian strategy, contrasting with retail investor panic.
Risk Warning : If tariffs rise to 25% on June 1st and trigger a full-blown trade war, the expectation of a global recession could suppress all risk assets; however, if the policy reverses, the crypto market may benefit from the dual advantages of "inflation hedging + regulatory friendliness," potentially recreating the 2020-2021-style rally. Investors should closely monitor geopolitical developments, control leverage, and seek strategic allocation opportunities amidst volatility.