Bitcoin Surrenders $90K as ‘Greenland’ Trade Tensions Trigger $750M Liquidation Event
Bitcoin’s correlation with the Nasdaq hits a four-year high as geopolitical tariff threats and a Massachusetts ruling against Kalshi drive a $750M leverage washout.
Bitcoin collapsed below the $90,000 psychological fortress early Tuesday, initiating a cascade of automated sell-offs that erased over $750 million in long positions within four hours. The violent 10% correction, driving the asset as low as $89,825, marks the definitive end of the early 2026 rally, pinning the downturn on escalating transatlantic trade hostilities.
Algorithmic Flush
Leverage vanished instantly. Data from Coinglass reveals that nearly 150,000 traders were liquidated as Bitcoin breached the 50-day moving average, a technical failure that forced market makers to hedge aggressively into a thin order book. The sheer velocity of the move, which dragged Ethereum below $3,100 and Solana to $128, confirms that the “buy the dip” mentality has fractured.
The 30-day rolling correlation between Bitcoin and the Nasdaq 100 hit 0.80 today, the tightest lockstep since 2022, stripping the asset of its ‘uncorrelated safe haven’ status just when macro hedges are needed most.
The ‘Greenland’ Risk Premium
The sell-off is not an isolated crypto event. Market sentiment curdled following reports of new administration tariffs targeting European exports, specifically linked to diplomatic disputes over Greenland, which sent risk assets tumbling globally. The trade war rhetoric forced a capital flight to the U.S. dollar and gold, leaving high-beta assets like crypto exposed. The $96,500 monthly high now serves as formidable resistance.
Regulatory Headwind: Kalshi Blocked
Compounding the risk-off tone, the prediction market sector took a direct hit in Boston. Massachusetts Superior Court Judge Christopher Barry-Smith issued a preliminary injunction effectively barring Kalshi from offering sports-prediction contracts in the state. The ruling validates the Massachusetts Attorney General’s argument that sports-linked event contracts constitute unlicensed gambling, regardless of their federal derivatives structuring.
With sports wagers driving over 80% of Kalshi’s volume (approx. $26B), the order sets a dangerous precedent for the industry, potentially forcing platforms to geofence millions of users or face rapid state-level enforcement contagion.
