Bitcoin Stumbles Amid Geopolitical Crisis—How Far Will the Decline Go?

▲ Donald Trump, European Union (EU), Bitcoin (BTC)/AI-generated image

As geopolitical tensions escalate and trade conflicts intensify, Bitcoin (BTC) has been unable to withstand downward pressure, extending its decline. The widening price gap with traditional safe-haven asset gold is making its title as “digital gold” seem increasingly hollow.

According to Bloomberg on February 17 (local time), capital outflows from the Bitcoin market are accelerating amid growing concerns over a potential tariff war between the United States and the European Union (EU).

As investors sell off cryptocurrencies to avoid geopolitical risks and shift their focus to tangible assets such as gold, the price movements of the two assets are diverging sharply. Gold recently surpassed $5,000 per ounce, hitting consecutive record highs, while Bitcoin has struggled significantly after retreating from its October peak of $126,000.

On-chain data from market analytics firm Santiment shows that investor sentiment in the crypto market has plunged to a level of 5, indicating extreme fear. Analysts attribute this to heightened global economic uncertainty fueled by the Trump administration’s hardline trade policies, which have dampened the appeal of risk assets like Bitcoin. Market experts note that Bitcoin has increasingly moved in tandem with technology stocks such as the Nasdaq, failing to function as a defensive safe-haven asset during geopolitical crises.

Bitcoin’s decline also coincides with a drop in open interest and weakened buying activity from institutional investors. Market participants are maintaining cautious positions as they assess the direction of trade negotiations and key macroeconomic indicators. The pervasive anxiety across the broader crypto market is leading investors to look for confirmation of lower support levels rather than anticipate a short-term technical rebound.

Disclaimer: This article is provided for investment reference purposes only, and no responsibility is assumed for any investment losses incurred based on it. The content should be interpreted solely for informational purposes.