Bitcoin fell sharply on Tuesday, dropping more than 3% to below $90,000 during US morning trading, as a wave of global risk aversion swept across markets.

The sell-off was driven by a sharp rout in Japan’s government bond market and renewed tariff threats from US President Donald Trump against Europe, pushing investors out of risk assets and into traditional safe havens.

The world’s largest cryptocurrency slipped to levels not seen since late last year, erasing much of its gains for 2026.

With the move, Bitcoin was trading only about 3% above where it began the year, highlighting how quickly sentiment has reversed.

Losses were not confined to Bitcoin. Ether fell more than 5% over the past 24 hours, sending the second-largest cryptocurrency back below the psychologically important $3,000 level for the first time since Jan. 2.

The decline marked a sharp reversal after a relatively stable start to the year.

The bearish momentum rippled through the broader digital asset market.

XRP and Solana dropped more than 5%, while Cardano and Dogecoin each slid more than 4%.

In total, the pullback shaved roughly 4% off the overall cryptocurrency market capitalisation, leaving it hovering just above the $3 trillion mark.

The crypto sell-off mirrored a broader retreat from risk assets across global markets.

In the US, the Nasdaq Composite was down nearly 2% on Tuesday. Asian and European equities also came under pressure, with Japan’s Nikkei index falling 2.5% overnight and Germany’s DAX declining about 1%.

Safe havens, by contrast, attracted heavy inflows. Gold surged more than 3%, and silver jumped 7%, with both precious metals hitting new record highs.

Investors increasingly turned to metals as protection against geopolitical uncertainty, trade tensions and instability in sovereign debt markets.

The turmoil in Japan’s government bond market added to the unease. A sharp sell-off in Japanese bonds sent yields higher, unsettling global fixed-income markets and reinforcing the move away from higher-risk assets such as equities and cryptocurrencies.

Trump’s renewed tariff threats have been a central driver of the market reaction.

The White House has warned it could impose 10% tariffs on imports from eight European countries starting Feb. 1, with the rate potentially rising to 25% by the summer.

For crypto investors, the rhetoric has been particularly damaging. Market participants recall April last year, when similar tariff threats triggered a sharp sell-off that saw Bitcoin lose roughly a third of its value in a short period.

Trump’s ambition to position the United States as the world’s crypto capital has increasingly linked digital assets to US risk sentiment.

As a result, the re-emergence of the so-called “sell America” trade has weighed heavily on Bitcoin alongside U.S. stocks.

At the same time, capital has flowed out of digital assets and into gold. The metal’s surge to record highs, including its first move above $4,700 per ounce earlier this year, has been driven in part by speculative inflows.

Investors who previously chased momentum in Bitcoin are now doing the same in precious metals, market participants said.

Despite the sharp downturn, long-term accumulation by major holders has continued.

Strategy, the world’s largest publicly listed Bitcoin holder, disclosed that it bought an additional 22,305 BTC last week for $2.13 billion, according to a filing with the US Securities and Exchange Commission.

The purchases were made at an average price of $95,284 per Bitcoin.

The acquisition lifted Strategy’s total holdings to 709,715 BTC, bought for approximately $53.92 billion at an average cost of $75,979 per coin.

The aggressive buying underscores the divide between short-term market volatility and long-term conviction among some institutional players.

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