BTC "flash crashes" below $92,000; macroeconomic risks become the trigger again?

Shaw, Jinse Finance

Bitcoin experienced another "flash crash" this morning, briefly falling below $92,000 from above $95,000, reaching a low of $91,910.20, a drop of over $3,500 in two hours, with a volatility of 3.85%.

Ethereum also saw a rapid decline, briefly falling below $3,200, reaching a low of $3,177.68, a drop of over $170 in two hours, with a volatility of 5.41%.

Coinglass data shows that in the past 4 hours, a total of $778 million in positions were liquidated across the network, including $750 million in long positions and $27.8763 million in short positions, with long positions being the primary target.

Of this, $226 million in BTC positions were liquidated and $123 million in ETH positions were liquidated. The cryptocurrency market, including Bitcoin and Ethereum, experienced another "flash crash." Is this closely related to the sudden geopolitical risks over the weekend? Has macro-geopolitical risk once again become the trigger for the cryptocurrency market turmoil? I. Another "Flash Crash" in the Cryptocurrency Market: BTC Briefly Drops Below $92,000 Bitcoin experienced a sudden "flash crash" this morning, briefly falling from above $95,000 to below $92,000, reaching a low of $91,910.20, a 24-hour drop of over 3.3%. It subsequently recovered slightly. Within two hours, it fell by over $3,500, a volatility of 3.85%. Ethereum also experienced a rapid decline, briefly falling below $3,200, reaching a low of $3,177.68, a 24-hour drop of over 3.4%, and a 2-hour drop of over $170, a volatility of 5.41%. According to Coinglass data, in the past 4 hours, a total of $778 million in positions were liquidated across the entire network, including $750 million in long positions and $27.8763 million in short positions, with long positions being the primary target. Specifically, $226 million in BTC positions were liquidated, $123 million in ETH positions were liquidated, and $58.3308 million in Solana positions were liquidated. In the last 24 hours, over 241,000 people worldwide have been liquidated, with a total liquidation amount of $864 million. The largest single liquidation occurred in Hyperliquid - BTC-USDT, valued at $25.8337 million. According to reports, Trump's announcement of tariffs on eight European countries over Greenland triggered market turmoil, increasing global risk aversion. Safe-haven assets such as gold and US Treasury bonds rose, while US stock futures fell. Furthermore, the recent stagnation of the US crypto market structure bill, with deepening disagreements between crypto industry leaders like Coinbase and regulators, has exacerbated market anxieties and increased market volatility. II. Trump Threatens to Impose Additional Tariffs on Europe, Macro-Geopolitical Risks Re-emerge Last Saturday, US President Trump announced on social media that he would impose a 10% tariff on goods imported into the US from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland, effective February 1st. He also declared that the tariff rate would increase to 25% from June 1st, until the parties involved reach an agreement on the US's "full and complete purchase" of Greenland. These eight countries were already affected by the US's 10% and 15% tariffs, and had already deployed a small number of military personnel to Greenland in the escalating dispute with the US over their future. Trump's move was quickly supported publicly by US Treasury Secretary Bessenter. In a media interview on January 18th, he declared that the European continent was too "weak" to ensure the security of Greenland, and therefore the island must be brought under the US's "protective umbrella." In a joint statement, the countries subject to the tariffs said, "The threat of tariffs undermines transatlantic relations and could lead to a dangerous downward spiral." Several EU countries are considering imposing tariffs on €93 billion worth of US goods imported into the EU, or restricting US companies' access to the EU market, in retaliation for Trump's tariffs on Europe in exchange for Greenland. Despite the Trump administration's tough stance, Washington is not monolithic. Both Republican and Democratic lawmakers have expressed concern about this strategy. Trump's threats have triggered market fears of a trade war, leading to increased risk aversion in global markets. Safe-haven assets such as gold and US Treasury bonds rose, while US stock futures fell. S&P 500 futures fell 0.71%, and Nasdaq futures fell as much as 1.1%. Euro Stoxx 50 futures fell 1.0%, and German DAX futures fell 1.1%. US 10-year Treasury futures rose 5 points, and 30-year Treasury futures also rose 5 points. Spot gold climbed above $4,690/ounce, hitting a new all-time high, up over 2% on the day. Spot silver climbed above $94/ounce, also a new all-time high, up over 4% on the day. The sudden collapse of the crypto market, including Bitcoin and Ethereum, may have been triggered by recent macro-geopolitical risks. III. The US Crypto Market Clarity Act stalls, exacerbating market concerns. The US Crypto Market Clarity Act (CLARITY Act) is facing difficulties in the US Senate, facing a difficult passage. Industry leaders, led by Coinbase CEO Brian Armstrong, believe they cannot support this version of the bill. Armstrong pointed out that the draft bill was "worse than maintaining the status quo," preferring no bill to a bad one. Subsequently, the White House expressed outrage at Coinbase's unilateral actions and considered withdrawing its support for the CLARITY Act. Reportedly, the White House demanded that Coinbase reach an agreement on yield, and its support now appears to depend on the final outcome of that yield agreement. Galaxy CEO Michael Novogratz pointed out the reasons for the slow progress of the cryptocurrency market structure bill. He said that there's nothing inherently wrong with both parties wanting to pass the bill. The real friction lies with banks, especially regarding stablecoins. Furthermore, Senate Democrats spoke again with representatives of the crypto industry on Friday to discuss the details of the cryptocurrency market structure bill, after the first amendment hearing was postponed. This call shows that Democrats are still actively pushing for legislation, aiming to complete the amendment hearings by the Agriculture Committee by the end of the month. If the bills involving the Banking and Agriculture Committees are approved, they will be merged into a unified version and submitted to the full Senate for a vote. The crypto market initially hoped that the CLARITY bill would bring clearer and more explicit regulatory rules, laying the foundation for industry compliance. However, currently, whether all parties can successfully reach an agreement on the CLARITY bill and push it through remains a big question mark, which has exacerbated market concerns to some extent. Fourth, the leverage effect of contracts has triggered liquidations again, increasing market volatility. According to Coinglass liquidation data monitored by on-chain analyst @ai_9684xtpa, large liquidations before 8:00 AM today were concentrated on Hyperliquid. In the past four hours, the liquidation amount on the Hyperliquid platform reached $235 million, of which BTC accounted for 44.68% ($105 million), followed by ETH and SOL, mainly liquidating long positions. Furthermore, since December 1, 2025, Hyperliquid's open interest (OI) has generally been on the rise (today it's $9.91 billion), while the number of active contract traders has gradually decreased (today it's 155,138), meaning that most of the current open positions are held by whales or institutions, with a high average position size per person. Recently, the number of open contracts on DEXs like Hyperliquid has gradually increased, and the leverage effect has also increased, amplifying volatility again during market downturns and easily triggering large short-term fluctuations. V. Market Analysis and Interpretation The main reason for this short-term rapid decline in the crypto market is the stimulation of macro-geopolitical events and the increased uncertainty of regulatory risks. Let's look at the main analyses and interpretations of this. 1. Senate Majority Leader Chuck Schumer: “Donald Trump’s reckless tariff policies have already driven up prices and damaged our economy, and now he is making matters worse. Incredibly, in order to achieve his unrealistic delusion of annexing Greenland, he is going to go even further by imposing tariffs on our closest ally. Senate Democrats will introduce legislation to prevent these tariff policies from being implemented and to avoid further damage to the US economy and European allies.” 2. Manfred Weber, leader of the European People's Party (EPP), the largest political group in the European Parliament, said on Saturday that a trade agreement with the US is no longer possible. “The EPP supports an EU-US trade agreement, but given Trump’s threats regarding Greenland, approval is impossible at this stage,” Weber posted on social media, adding that the EU’s agreement to lower tariffs on “US products” “must be suspended.” The EU-US trade agreement was reached last summer by European Commission President Ursula von der Leyen and Donald Trump. Parts of the agreement are already in effect, but it still requires formal approval from the European Parliament. If EPP members join forces with left-leaning political groups, they may have enough votes to delay or veto its approval.

3. European Central Bank Chief Economist Philip Lane warned that most markets view this as an internal European matter: the ECB can currently continue its accommodative policies, but the Federal Reserve's "struggle" over its mandate independence could disrupt global markets by increasing the US term premium and reassessing the role of the dollar. Lane's framework is important because it points to the most crucial transmission channels for Bitcoin: real yields, dollar liquidity, and the credibility framework that sustains the current macroeconomic system. Bitcoin's historical upward momentum has stemmed from the ever-expanding liquidity premium: Bitcoin rises when real yields are low, discount rates are loose, and risk appetite is high.

4. Cathie Wood, CEO of Ark Invest, believes that Bitcoin's low correlation with other major asset classes makes it a valuable diversification tool for institutional portfolios. In a comprehensive report, Wood points out that Bitcoin's low correlation with other major asset classes, including gold, stocks, and bonds, is why asset allocators should take it seriously. She writes, "Bitcoin should be a good source of diversification for asset allocators seeking higher risk-return investments." 5. CryptoQuant analyst Axel writes that Bitcoin's price (currently $95,500) is approaching the average purchase cost of short-term holders ($99,460), with the price difference narrowing to only 4%. Axel explains that the current situation is within a decision-making range, rather than a market crash. Historically, the area near the cost benchmark has often been accompanied by increased volatility and has become a market reaction zone, potentially continuing the trend or triggering a reversal—either returning to a premium or facing a new round of selling pressure. If the price stabilizes above $100,000 and short-term holders turn from losses to profits, the outlook shifts back to bullish. If the discount rate returns to double digits (below -10%), corresponding to a price drop below approximately $89,500, it will significantly exacerbate the pressure on losing positions. 6. On-chain data analytics company CryptoQuant points out that the recent Bitcoin price rebound is more like a short-lived rally than a sustained recovery, as market demand remains weak. CryptoQuant stated in a report on Friday: "Bitcoin has risen 21% since November 21, which appears to be a bear market rally. Demand conditions have improved slightly but remain weak." A bear market rally refers to a sharp price recovery within an overall downtrend, but it does not change the fundamental bear market structure. Research Director Julio Moreno stated that the continued contraction in demand remains a key factor behind Bitcoin's recent rebound. Bitcoin has risen approximately 21% since November 21st after falling about 19% and breaking below its 365-day moving average. CryptoQuant considers this moving average a key dividing line between bull and bear markets; a break below it confirms a bear market. The current price action is highly similar to that of 2022—when Bitcoin also rebounded strongly after breaking below its 365-day moving average, only to be blocked near the level and resume its decline. According to CryptoQuant data, Bitcoin is currently approaching this long-term moving average again (currently around $101,000) but has not yet successfully recovered. The firm stated that in past bear markets, similar failures to recover this moving average have often triggered a new round of declines. “Many market participants at the time believed the bear market was over, the four-year cycle had failed, and a supercycle was imminent—a sentiment quite similar to the current market,” CryptoQuant wrote. “However, fundamentals and technical indicators still suggest we are still in a bear market.” 7. Tom Lee, Chairman of BitMine and co-founder of Fundstrat, stated at the latest BitMine shareholder meeting that Ethereum is at the heart of a new round of financial infrastructure transformation, and 2026 may be a pivotal year for Ethereum's full-blown growth. Lee pointed out that Ethereum reached an all-time high in the ETH/BTC exchange rate in 2021, and with the tokenization of real-world assets and accelerated adoption by mainstream financial institutions and users, this ratio is expected to break through the previous high again in 2026. Standard Chartered Bank also considers 2026 “the year of Ethereum,” predicting an Ethereum price of $12,000.

8. James Wynn, a trader who was nearly "bankrupt," posted on social media that Ethereum looks quite strong. The "cycle" we've been waiting for may be unfolding. Many are still on the sidelines, while many have already scattered, going back to work, or continuing to live with their mothers. This time, it might really be here. I've said before that the first quarter will be bullish. ETH, PEPE, DRB, BYTE.