Analysis: With weakening risk appetite and tightening liquidity, Bitcoin is struggling to rebuild its upward momentum.

PANews reported on January 21 that Singapore-based crypto investment firm QCP Capital published an analysis stating that global markets have shifted to a risk-averse mode due to soaring Japanese government bond yields and escalating trade tensions between the US and Europe, causing Bitcoin to fall below $90,000. The yield on Japan's 10-year government bonds rose to approximately 2.29%, the highest level since 1999, raising concerns about the country's fiscal sustainability. Japan's government debt-to-GDP ratio has exceeded 240%, with total debt approaching 1342 trillion yen, and debt servicing is projected to account for a quarter of fiscal spending by 2026. Meanwhile, President Trump announced a 10% tariff on eight European countries opposing US control of Greenland (effective February 1, rising to 25% on June 1), and Europe has quickly prepared retaliatory measures, potentially escalating bilateral relations, worth approximately $650-700 billion annually, into a confrontational phase. The European Parliament is considering suspending ratification of the US-EU trade agreement reached last July.

Against this backdrop, Bitcoin failed to act as a hedge, instead exhibiting characteristics of a high-beta risk asset, highly sensitive to interest rates, geopolitics, and cross-market volatility. With declining risk appetite and marginal tightening of liquidity, Bitcoin struggled to rebuild its upward momentum after recovering $97,000. Given the current uncertainty surrounding policy signals, the crypto market is likely to maintain a passive rather than trend-driven approach, with investors focusing more on capital preservation and wary of systemic risks potentially triggered by policy missteps.