Bitcoin Slips Below $90,000 Amid US-EU Trade Friction; Analysts Divided on Correction Depth

On January 20, 2026, the cryptocurrency market witnessed Bitcoin retreating into a familiar two-month consolidation zone after failing to sustain its position above a critical technical threshold. This downward momentum was largely catalyzed by escalating geopolitical friction between the United States and the European Union, fueled by President Trump’s recent threats to implement aggressive new import tariffs. Just as Wall Street prepared for its daily opening, the digital asset was unable to successfully retest the $90,000 mark, leading to an immediate wave of selling pressure. Consequently, the Fear and Greed Index has shifted back into "Fear" territory, despite some on-chain metrics offering a more nuanced and optimistic perspective.

During the current market session, Bitcoin has been confined to a narrow trading corridor between $89,990 and $90,900. This price stagnation is occurring alongside a notable surge in the yield of ten-year U.S. Treasury bonds, which climbed to 4.28%—the highest level recorded since September 3. Technical analysts have pointed to several concerning developments, most notably the "death cross" where the 21-week simple moving average (SMA) crossed below the 51-week SMA. Keith Alan, the co-founder of Material Indicators, observed that this specific pattern has been forming for over a month, suggesting that while it looks bearish, it has historically signaled the formation of a macro bottom rather than a total market collapse.

Adding to the cautious sentiment, veteran trader Peter Brandt has highlighted a two-month "rising wedge" formation that could potentially lead to a significant price correction. Brandt, who has been active in the markets since 1975, suggested that Bitcoin might drop to a range between $58,000 and $62,000, representing a 33% to 37% decline from its recent peak near $92,400. While he admitted that diagonal patterns carry a 50% failure rate, the technical pressure remains evident. Currently, the $90,000 level serves as a vital support zone for bulls, aligning with the 200-period moving average on the four-hour chart. Analysts warn that a failure to hold this level could see the price slide toward $80,000 or $85,000, with more extreme targets sitting at the April 2025 low of $74,500 and the 200-week SMA at $68,000.

Despite these bearish technical indicators, some market observers are finding reasons for optimism through on-chain data. Experts at On-Chain Mind have identified a buy signal from the Hash Ribbons indicator, a metric that previously preceded a 25% rally in July 2025 when Bitcoin climbed from $98,000 to its former all-time high of $123,200. This suggests that the underlying mining health of the network remains robust. Furthermore, CryptoQuant has reported a "golden cross" on the Fear and Greed Index, marking the first time since May 2025 that the 30-day moving average has crossed above the 90-day moving average. According to analyst Julio Moreno, this shift typically indicates that short-term market sentiment is beginning to improve relative to the broader long-term trend.

The overarching macroeconomic environment continues to be dominated by trade policy uncertainty. President Trump’s proposal to levy 10% tariffs on imports from eight European nations starting February 1—a move linked to his unconventional demand for the United States to purchase Greenland—has sparked fears of a full-scale trade war. In response, the European Union is reportedly preparing its "Anti-Coercion Instrument" to protect its economic interests. This climate of geopolitical instability, combined with rising bond yields, has prompted investors to rotate capital into traditional safe-haven assets. Gold, for instance, has recently surged to new record highs as a result of this flight to quality.

Market participants are now closely watching how Bitcoin reacts to these external pressures as the new year unfolds. Trader Daan Crypto Trades noted that the recent attempt at a breakout has effectively failed, leading him to pivot his attention toward the 2026 yearly opening price near $87,000 as a potential area of support. As the market navigates this intersection of technical weakness and geopolitical turmoil, the ability of Bitcoin to reclaim the $90,000 level will be crucial for determining the trajectory of the digital asset in the coming months. The divergence between bearish chart patterns and bullish on-chain signals suggests a period of high volatility lies ahead for crypto investors.