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Bitcoin fell below key technical levels on Wednesday, as rising geopolitical risks tied to the U.S.-Greenland dispute and mounting concerns over Japan’s fiscal outlook curbed appetite for speculative assets.
The world’s largest cryptocurrency slipped 1.2% to $89,801 by 01:10 ET, hovering near its weakest levels of the year. The move extended Bitcoin’s sluggish start to 2026, with the asset struggling to sustain any meaningful rebound amid a broad risk-off mood.
Crypto markets have been further weighed down by the delay of a major U.S. bill aimed at creating a regulatory framework for digital assets, depriving the sector of a potential bullish catalyst.
Geopolitics and Fiscal Risks Pressure Risk Appetite
Sentiment deteriorated sharply after President Donald Trump escalated his demands over Greenland, threatening tariffs on eight European countries and declining to rule out military action. Trump is set to attend the World Economic Forum in Davos, where he said he will meet “various parties” to discuss the issue.
At the same time, global bond yields surged, led by Japan, as investors grew uneasy over the country’s towering public debt. Those concerns intensified after Prime Minister Sanae Takaichi announced a snap election for early February, with markets questioning how Tokyo will fund her proposed stimulus plans and tax cuts.
The combination of geopolitical tension and fiscal anxiety pushed investors away from high-risk assets such as cryptocurrencies and toward traditional safe havens, especially gold, which has surged to a series of record highs this week.
Strategy’s $2.1 Billion Purchase Fails to Lift Prices
Bitcoin found little support from news that Strategy Inc. purchased 22,305 coins between January 12 and January 19 for about $2.13 billion, lifting its total holdings to 709,715 bitcoins and cementing its status as the largest corporate holder.
Despite the scale of the purchase, Strategy shares fell 7%, and Bitcoin showed little reaction. Investor confidence in the company’s Bitcoin-centric strategy has eroded over the past year after prolonged weakness in crypto prices led to deep paper losses. Earlier this month, Strategy disclosed an unrealized loss of $17.4 billion in the fourth quarter, intensifying doubts over a model largely funded by debt and share issuance.
Altcoins Follow Bitcoin Lower
Losses spread across the broader crypto market. Ether slid 4.8% to $2,984, its weakest level since late December. XRP and BNB fell 1.5% and 3.8% respectively, while Solana and Cardano dropped about 2% each.
Among memecoins, Dogecoin and $TRUMP both declined by more than 1%, underscoring the market’s defensive posture as uncertainty dominates global sentiment.
