Bitcoin briefly climbed above $90,000 on 21 January after President Donald Trump de-escalated tensions over Greenland during his Davos speech.
The rally followed a volatile move that saw bitcoin jump from around $88,200 to nearly $90,300 within three hours.
Market sentiment had weakened earlier after Trump threatened a 200% tariff on French wine, pushing bitcoin down from $95,000 to near $88,000.
Trump also referenced cryptocurrency during his World Economic Forum address in Davos, fuelling short-term optimism for pro-innovation regulation.
The gains quickly faded, with bitcoin sliding back to about $87,200 within hours.
The sharp reversal triggered more than $210 million in liquidations across leveraged positions in four hours.
The sell-off in crypto mirrored broader risk aversion as volatility hit global equity markets.
Investors were rattled by turmoil in Japan’s government bond market, where long-dated yields spiked by over 25 basis points in one session.
US Treasury Secretary Scott Bessent and Japanese Finance Minister Katayama Takayuki reportedly issued joint statements to stabilise markets.
“In the immediate term, simultaneous pressure on bonds and risk assets may dampen the appetite for crypto,”
The Bitunix analyst team said.
“Over the medium term, persistent politicisation of bond markets reinforces the case for bitcoin as a non-sovereign hard-money asset,”
The Bitunix analyst team added.
At the time of reporting, Bitcoin price was $89,756.45.