BTC dips near $88,000 before Trump’s Davos speech, putting U.S. trading at risk

European markets remained under pressure on Wednesday as equities extended losses, bond-market support weakened, and gold surged to fresh record highs above $4,860 an ounce, highlighting a continued shift toward defensive positioning.

Crypto markets surrendered early gains as a tentative rebound faded. Bitcoin slipped back below $89,000 as risk appetite deteriorated across European stocks and currencies. The cryptocurrency was trading near $88,800 during the U.S. session after briefly pushing toward $90,000 earlier in the day, indicating the move was more of a consolidation following heavy selling than a meaningful recovery.

Major digital assets mirrored bitcoin’s price action, initially stabilizing before losing momentum as broader financial markets softened.

The mood in traditional markets worsened through the European afternoon. The Stoxx 600 fell 0.5%, extending its losing streak to four sessions—the longest since November—with financial and insurance stocks leading the decline. Bond markets, which had offered brief support earlier, also came under pressure as declines in European yields stalled.

U.S. equity futures edged lower, while gold climbed another 2% to new record highs above $4,860 an ounce, reinforcing the view that investors remain focused on capital preservation rather than rotating back into risk assets.

Crypto markets had attempted to find footing earlier after Japanese government bonds rebounded from a sharp selloff earlier in the week, following reassurances from officials. That development helped bitcoin recoup part of Tuesday’s losses, but the rebound proved fragile as macroeconomic headwinds persisted.

Uncertainty continues to center on President Donald Trump’s escalating tensions with Europe ahead of his address at the World Economic Forum in Davos. Trump has threatened tariffs on European countries that oppose his push for U.S. control or acquisition of Greenland, reviving concerns over trade conflict and policy volatility.

Those concerns have weighed on the U.S. dollar, which is now barely holding onto gains for the year, while currencies such as the British pound have come under pressure. Tuesday’s selloff wiped out more than $1 billion in leveraged crypto positions, and Wednesday’s price action suggests the market is still digesting that forced unwinding.