The Geopolitical Selloff: Tariffs and the $700M ETF Exodus

The cryptocurrency market has entered a sharp correction phase this Wednesday, January 21, 2026, as a perfect storm of geopolitical tension and macroeconomic de-risking takes hold.

Bitcoin (BTC) has tumbled below the critical $89,000 support level, trading near $88,600, while Ethereum (ETH) has slipped under the $3,000 psychological barrier for the first time in weeks.

The downturn was catalyzed by escalating trade friction between the U.S. and the EU, specifically regarding new tariff threats and the EU’s potential activation of its "anti-coercion tool."

Adding weight to the bearish sentiment, billionaire investor Ray Dalio issued a sobering warning at a global summit, stating that the world has entered a "new phase of financial conflict" where geopolitical disputes are now directly impacting capital flows and sovereign asset allocations. This "safe-haven repricing" has seen institutional investors pull a staggering $713 million from U.S. Spot Bitcoin and Ether ETFs in a single day—the largest outflow event since late 2025.

Is this the end?

Analysts suggest this is not a fundamental rejection of crypto but a temporary flight to liquidity as investors watch gold approach the $5,000 mark. With Bitcoin having dropped nearly 10% from its recent peak of $98,000, the market is testing the resolve the corrections. 

Coinidol.com reported previously that since January 2, the cryptocurrency has traded above the moving average lines but below the $94,000 level. The upward trend will resume if purchasers protect the $90,000 support. On January 21 BTC price is moving around $87,925.

Disclaimer. The data provided is collected by the author and is not sponsored by any company or token developer. This is not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by Coinidol.com. Readers should do their research before investing in funds.