How President Trump’s tariff threat cycle breaks past strategy for the first time and Bitcoin misses Sunday night’s relief rally

On Monday morning, the market did what it always does when politics ceases to be noise and takes over the wheel.

Screens turned red, chat was filled with the same half-joking about “macro” and Bitcoin fell below the psychological level traders had just spent the weekend defending. The headline risks had familiar flavors, tariffs, allies, threats timed to garner maximum attention, and just enough ambiguity to keep leverage on edge.

This time the spark came from Greenland.

Over the weekend, President Donald Trump stepped up his pressure campaign It imposed an additional 10% tariff starting February 1 on European allies opposed to U.S. efforts to gain territory, and threatened to raise them. It will be even later this year.

By Monday, the market was no longer treating it as a flippant statement. U.S. futures fell, European indexes fell, and the situation shifted from the geopolitical arena to an actual trade shock that could ripple across risk assets.

For crypto traders, the change in mood felt personal. Many desks still remember October. It comes as tariff headlines helped trigger one of the most troubling liquidation cascades this cycle. The kind that empties leverage and makes even good positions look foolish for 48 hours.

That memory lies quietly in the background, waiting for your next excuse.

Then the excuse arrived with a letter.

At Davos, a BBC report and widespread reporting revealed that President Trump sent a memo to Norway’s prime minister linking Greenland to the Nobel Peace Prize, suggesting he was justified in taking a tougher stance because it had not won the prize.

The text of the message was also passed through diplomatic channels, according to reports citing multiple officials.

It sounded ridiculous, but it carried weight because authorities verified it was real. It also gave the market what it hated: a story that could escalate without warning.

That’s the important part.

The “tariff cycle” and the Greenland episode

Back in October, posts in The Kobeissi Letter described what it called a strategy for investors that included tariff episodes, repeated and cryptic threats, panic selling, weekend rhetoric, a spike in futures prices Sunday night, and the slow march toward a deal that would breathe life into the market.

Today’s question is simple. Where are we in that loop now, and can we maintain that loop?

Stripping away the social media bravado and looking at this week, Greenland fits all too neatly into the first half of Kobessi’s framework.

The first threat came on Friday, when President Trump said he could raise tariffs on countries that refuse to “agree” to a push toward Greenland.

Over the weekend, the threat became more concrete, with the imposition of additional 10% tariffs on eight European countries starting February 1, with the possibility of higher rates at the end of the year if no deal is reached.

Target countries objected to this, and that resistance became part of the trade negotiations rather than an appendage.

In London, Prime Minister Keir Starmer warned that a trade war was in no one’s interest and defended Greenland’s right to decide its own future alongside Denmark. Officials across Europe debated retaliatory measures and how far they would go if tariffs were to move from threat to policy.

Then, on Monday, a diplomatic curveball was delivered. It was a Nobel Prize letter that expanded the conversation from a tariff dispute to questions of intent and credibility.

At the same time, the market tape refused to follow the most subtle parts of Kobessi’s “strategy”.

The model assumes that the White House is likely to dangle a solution by Sunday evening, causing futures prices to spike, only to fade by the start of trading on Monday. That pop is a pressure relief valve.

we couldn’t figure it out.

Instead, U.S. futures, and subsequently Bitcoin, fell on Monday due to the threat of tariffs.

So if we are to force this Greenland episode into numbered steps, the cleanest answer is that we are still part of the “targets react” phase, a cycle in which allies push back, authorities change their stance, and markets trade on uncertainty.

In other words, it is the energy of Step 5.

There are details that further complicate the situation. Treasury Secretary Scott Bessent appeared on television, but Kobessi’s sequence marks the moment the government reassured investors after trading opened on Monday.

But today’s news coverage of Bessent is more legitimizing than reassuring, arguing that Europe is too weak to guarantee Greenland’s security. Such messages only increase conflict, not calm it down.

Yes, the “Treasury on TV” moment appeared, but the calming features did not.

What crypto traders see and why it matters

Bitcoin doesn’t need geopolitical reasons to fluctuate and can do so on its own, but when the world goes into risk-off mode and leverage tips in the wrong direction, Bitcoin reacts badly.

Bitcoin fell to around $92,500 in early trading on Monday as the threat of tariffs hit sentiment. This move was a sharp and rapid decline, knocking thousands of dollars off the price in a short time frame.

Whether you call it fear or positioning, what traders were actually reacting to was a sense that the situation had not yet reached the exit point.

This is why the October comparison keeps coming up. In October 2025, tariff headlines surrounding China triggered a brutal unwind, and traders still call it the moment the market learned anew how fragile leverage can be.

While the size of today’s selloff is smaller and the market structure is different, the sentiment pattern rhymes as traders look at potentially escalating headlines, remember what a liquidation is like, and start reducing risk before someone forces them.

Will the thesis be successful?

Kobessi framed the tariff cycle as a “precise strategy.” Greenland is a stress test for that claim.

This paper is useful as a way to explain how modern markets digest President Trump’s tariff drama, first the threat, then the panic, then the build-up over the weekend, and then the scramble for the headline “solution” that causes repositioning.

Acting as if de-escalation always arrives on time is a recipe for disaster.

Greenland has yet to offer such a clean détente. This is because the main subject is national sovereignty rather than pure macroeconomics.

Instead, the story has escalated into a diplomatic letter that European leaders are taking seriously, and the administration’s messaging, including via Bessent, leans toward vindication.

This is important because the market trades on paths, not punchlines. The strategy built around a predictable Sunday night relief rally hinges on whether someone chooses relief.

Pressure is the key now.

Label for this moment and two triggers for seeing

Monday’s cleanest label is simple.

Escalation without Sunday off-ramp.

An off-ramp must appear after the fact for the cycle to return to something familiar. The Sunday futures moment has already come and gone, and it’s because it came in the wrong direction. futures

Two things are important here.

1. Credible de-escalation signals in the coming days, not atmosphere, not “under consideration”, but concrete, real lines about negotiations, delays, changes in scope or terms that soften the path for February 1st. Markets can live with conflict, but they wrestle with never-ending timelines.
2. The tape should confirm that the panic has reached its peak. This reversal looks set to continue throughout the US cash trading period, with risk assets stabilizing rather than surging and cryptocurrencies cooling without another forced unwind. We don’t need a rally to know that deleveraging is happening. We need price action to stop acting as if we are one step away from a break.

If we get a classic “Sunday night relief” move, it’s not just that we missed it, but the resolution headlines will arrive next weekend before futures open, giving traders permission to reprice the risk.

Until then, the headlines are in the damaging stage, and the market spends the rest of the day trying to figure out whether the damage is temporary.

For those who experienced October’s liquidation shock, the decision is far from abstract. It’s like a finger on the close button, and one post, one interview, or what sounds like a parody, and one letter that comes in as a policy can change the timeline. letter