Analysis: Tariff Threats Continue to Impact Bitcoin as Market Makers May Amplify Volatility

Bitcoin's price has dipped below $91,000 amid escalating geopolitical tensions triggered by U.S. President Donald Trump's tariff threats against European nations opposing his push to acquire Greenland.[The Economic Times] This event has synchronized declines in Bitcoin and major cryptocurrencies with Nasdaq futures, highlighting how macro risks can ripple through crypto markets.[DL News]

Geopolitical Tensions Drive Risk-Off Sentiment

On January 20, 2026, Trump announced a 10% tariff on goods from Denmark, Sweden, France, Germany, the Netherlands, Finland, the UK, and Norway, effective February 1 unless the U.S. gains control of Greenland. Discussions with NATO Secretary General Mark Rutte at the World Economic Forum in Davos further intensified uncertainty, described as "imperative for national and world security."[The Economic Times]

This "Sell America" trade revived as investors dumped U.S. assets, including stocks, bonds, and the dollar, while safe-haven gold surged to a record $4,725 per ounce. Bitcoin, often viewed as a digital hedge, instead correlated with risk assets, falling nearly 5% weekly to around $90,878, with the total crypto market cap dropping 2.2%.[DL News] Ethereum followed suit, declining 3.6% to $3,090.[The Defiant]

Analysts like Bitget's Ryan Lee attribute this to a "macro-driven correction," with $865 million in leveraged BTC liquidations amid U.S.-EU trade war fears. The daily RSI at 47 and bearish MACD crossover reinforce short-term caution, though Bitcoin has consolidated in an $80K–$98K range for 59 days—mirroring post-2022 patterns that preceded breakouts.[The Economic Times]

Negative Gamma Exposure: Market Makers Fuel Volatility

Beyond macro pressures, internal market dynamics could exacerbate swings. Data reveals Bitcoin options market makers hold negative Gamma exposure in the $86,000–$95,000 range. In negative Gamma scenarios, dealers hedge by buying during price rises (pushing it higher) and selling during falls (amplifying drops), creating feedback loops that heighten market volatility.[BlockBeats]

Derivatives positioning supports a bearish tilt, with traders pricing in a potential 17% drop to $75,000 by June for downside protection amid low realized volatility.[DL News] On-chain signals offer some optimism: Bitcoin trades below key moving averages (MA7 to MA720), signaling an "optimal DCA zone" for accumulation, while network growth hits 2022 lows—often a precursor to consolidation before recovery.[BeInCrypto]

Outlook: Consolidation Amid Uncertainty

Experts foresee stabilization around $85,000–$95,000 if tensions ease, with potential upside to the 61.8% Fibonacci at $94,253. However, persistent tariffs or Fed leadership changes could prolong the Bitcoin consolidation phase into 2026.[The Economic Times][BeInCrypto]

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