Why did Bitcoin drop today? Trump's tariffs triggered a "sell US" trade, and safe-haven funds flooded into gold.

Bitcoin today fell to around $88,500, while gold surged to $4,755. Trump’s Greenland tariff threats triggered a global sell-off, with the S&P 500 plunging 2.1%, evaporating $1.2 trillion. The BTC-Gold ratio RSI dropped to 30, reaching the bottom levels of 2015, 2018, and 2022 bear markets, indicating a possible rebound.

Trump’s Greenland Tariff Threat Sparks Global Market Panic

Last Saturday, Trump threatened that unless seven EU countries and the UK support U.S. control over Greenland, he would impose new tariffs on these nations. During a White House briefing on Tuesday, when asked how far he was willing to go to gain control of this Danish semi-autonomous territory, Trump responded, “You’ll find out.” A day earlier, when NBC News asked if he was willing to use force to seize it, Trump replied, “No comment.”

The EU is the U.S.’s largest trading partner, and Trump’s statements have raised concerns among investors about further deterioration of transatlantic relations, sparking new market volatility. Why did Bitcoin drop today? One core reason is this geopolitical uncertainty. On Monday night, Trump further escalated tariff threats, saying that if French President Macron refuses to join his proposed “Peace Commission,” he will impose a 200% tariff on French wine and champagne.

In terms of market performance, the S&P 500 closed down about 2.1% on Tuesday, marking its worst single-day performance since October. The Nasdaq Composite fell over 2.4%, and the Dow Jones Industrial Average dropped about 870 points, a decline of just over 1.7%. This sell-off wiped out over $1.2 trillion in market value for the S&P 500, erasing all of its gains for the year so far.

Investors also sold off U.S. Treasuries, pushing yields higher. The 10-year Treasury yield rose to its highest level since August, and the 30-year Treasury yield hit a new high since September. European markets declined significantly for the second consecutive day, with Germany’s DAX down 1%, the UK’s FTSE 100 down 0.7%, and the STOXX Europe 600 (Europe’s version of the S&P 500) down 0.7%.

“Sell US” Trade Returns, Funds Flow into Gold

The CBOE Volatility Index (VIX), known as Wall Street’s “fear gauge,” rose to its highest level since mid-November amid multiple risk factors. As a safe haven during turbulent times, precious metals also hit record highs. Gold rose over 2% on Tuesday, while silver traded slightly higher intraday. Silver prices have gained over 30% this year, prompting the U.S. Mint to temporarily suspend silver coin sales to reprice.

The ICE US Dollar Index, which measures the strength of the dollar against a basket of international currencies, fell 0.8%, nearly the largest single-day decline since April this year, when Trump announced the “reciprocal tariffs” agenda, triggering a synchronized sell-off in U.S. stocks and bonds. Evercore ISI’s Krishna Guha wrote on Tuesday: “This is another ‘sell US’ trade, just playing out amid broader global risk shocks.”

The term “sell US” originates from the market reaction after Trump launched a global tariff agenda in April 2025, imposing high tariffs on dozens of countries. Investors feared the U.S. was no longer a reliable trading partner, leading to a sell-off in U.S. stocks and bonds, and a shift into precious metals and foreign equities as hedges. Guha believes the current sell-off isn’t more severe partly because investors remain optimistic that the Supreme Court might limit Trump’s tariff powers.

He warns, “If the situation spirals out of control, the impact will be severe and long-lasting, including shocks to the dollar.” Citigroup analyst Scott Chronert wrote in a client report: “Just two weeks into the new year, the impact and intensity of the shocks faced by U.S. markets are staggering.” UBS CEO Sergio Ermotti also stated, “I see no path to a quick recovery in the short term.”

BTC to Gold RSI Drops to Bear Market Bottom Levels

(Source: Trading View)

Another key factor behind Bitcoin’s decline today is the historic undervaluation of the BTC-to-Gold ratio. According to Michaël van de Poppe, Chief Investment Officer at MN Capital, Bitcoin’s price today dropped to $89,655, marking the fourth time in history that Bitcoin’s valuation against gold reached an RSI of 30. The last times RSI was this low were at bear market lows in 2015, 2018, and 2022.

“History shows that Bitcoin is currently severely undervalued relative to gold. Now is a good time to buy,” said van de Poppe, adding that the vertical acceleration in gold prices indicates how quickly Bitcoin must catch up. Renowned crypto investor Ansem also added that Bitcoin’s poor performance relative to gold over the past year was due to older holders cashing out at the four-year cycle top when the price was below $100,000.

He predicts that the capitulation phase will end sometime in 2026. “As the allocation of crypto assets adjusts, and gold and silver end their decade-long consolidation, Bitcoin is about to experience a rally,” said Ansem. “Bitcoin as a digital alternative to gold is easier to transport across borders, easier to trade, and overall a better asset in a highly digitalized world.”

Technical Analysis: Support at $88,000 to $90,000 is Key

(Source: Trading View)

The daily chart shows that after a significant correction, the market is consolidating, with a gradually constructive structure, but this depends on whether support levels hold. Since the December lows, prices have formed higher lows and are trending upward along an ascending trendline, indicating demand is improving and the recovery is controlled rather than panic-driven. Recently, prices retreated from $95,000–$97,000, breaking below obvious resistance around $100,000–$101,000, confirming active selling at high levels.

The critical support zone is around $88,000–$90,000. This area coincides with the ascending trendline and previous consolidation zones, making it a key level for bulls to defend. As long as prices stay above this zone, the overall structure remains intact, favoring further upward movement. A continued decline would invalidate the bullish momentum and open the door to further retracement toward lows of $80,000.

Key Price Levels Summary

Core Support: $88,000–$90,000 (confluence of ascending trendline and consolidation zone)

Short-term Resistance: $100,000–$101,000 (active seller zone)

Breakout Target: $105,000–$110,000 (if a clean break above $101,000)

Capitulation Level: $69,000 (2021 cycle high, Saylor’s cost basis around $75,000)

The RSI hovers around 40, reflecting neutral market momentum, supporting the view that the market is in a reset phase rather than an overextended trend. If Bitcoin continues to hold support at $88,000–$90,000, prices may continue higher and attempt to challenge resistance at $100,000–$101,000 again. From a technical perspective, Bitcoin must stay above the previous cycle’s peak of about $69,000 in 2026 for the bullish outlook to remain valid.

“If we break below this level, based on Saylor’s current average cost of around $75,000, trading below this level would be a full capitulation and a rare buying opportunity,” Ansem pointed out.