President Donald Trump’s announcement on February 1 that he would not impose tariffs as planned caused a sharp reversal in risk assets, with Bitcoin testing $87,300 in early trading before rebounding above $90,000.
The move erased much of a two-day decline due to trade war concerns related to President Trump’s Greenland policy push and confirmed Bitcoin’s status as a high-beta macro asset that amplifies directional fluctuations when geopolitical headlines change rapidly.
Gold and silver fell following the announcement, signaling a return to risk-on sentiment. Gold fell from about $4,850 to $4,777 per ounce, and silver fell from about $93 to $90.60 per ounce. However, while both metals rallied about 1% overnight, Bitcoin was flat at around $90,000.
The safe-haven bid that supported precious metals amid tariff fears has dissipated as traders return to riskier assets.
At the time of writing, Bitcoin was trading at $90,213.45, up 2.1% in the hour and 2% on the day. According to CoinGlass data, the rebound resulted in $160 million in short-term liquidations in just one hour, bringing the total liquidation value of long and short positions to more than $1 billion on January 21st.
How Greenland became a tariff threat
Over the weekend and early week, President Trump’s campaign to acquire Greenland turned into a trade war-like threat. He announced additional tariffs on products from several European countries starting February 1, using escalation language related to securing the Greenland Agreement.
This framework turned geopolitical oddities into concrete risk-off triggers. Stocks sold off, the dollar strengthened and Bitcoin fell below $92,000 as traders reassessed the tail risks of a flare-up in trade tensions.
From January 19th to 20th, tariff concerns extended beyond cryptocurrencies. Amid the shock, risk assets across the board fell sharply, with Bitcoin depreciating by up to 7%. Cryptocurrency-specific pressures intensified as leveraged positioning amplified the move.
CoinGlass liquidation data shows an extended period of liquidation after a major blowout earlier in the week, suggesting the tape was vulnerable in the lead-up to the announcement.
$87,000 to $90,000 per hour
Bitcoin’s intraday range today stretches from a low of $87,304 to a high of $90,379, with a swing of 3.5%, demonstrating how quickly sentiment can reverse when macro headlines reverse.
Prices hit lows as European markets open amid concerns about tariffs. The backlash began after President Trump posted on Truth Social that he would form a “framework for future agreements” with NATO Secretary-General Mark Rutte on Greenland and the Arctic region and would not impose tariffs as scheduled on February 1.
The timing of the bounce was also perfect. Within an hour of posting, Bitcoin regained $90,000 and short positions began to be liquidated. This movement is not limited to cryptocurrencies, with stock futures rising, US Treasury yields stabilizing, and gold and silver reversing their safe-haven prices.
The past few days have been less about Bitcoin and more like trading Bitcoin as a high-beta risk asset during a macro shock. Tariffs and geopolitical uncertainty hit stocks, currencies, and interest rates, and Bitcoin followed suit.
Derivatives positioning amplified the downside when technical levels broke, creating a feedback loop between spot price movements and forced liquidations.
The sharp rebound post “no tariffs” follows the same pattern in reverse. Macro headlines removed tail risks and risk assets rallied sharply, with Bitcoin leading the rally.
The move confirms what institutional investor observers have been saying for months. Bitcoin increasingly behaves like a lever of risk sentiment, especially during periods of prevailing macro uncertainty.
The size of the liquidation highlights the extent of leverage built into the system. On January 21st alone, total liquidations totaled more than $1 billion, split between longs caught in the morning selloff and shorts forced to cover in the afternoon rally, suggesting traders were poised to continue in both directions but were thrown into disarray when the narrative reversed.
Risk-off relaxation
Gold’s fall from $4,850 to $4,777 per ounce and silver’s fall from $93 to $90.60 per ounce showed a clear rotation out of safe-haven assets.
Both metals rallied during the initial tariff scare as investors hedged against geopolitical risks and the possibility of a weaker dollar. That bid disappeared when President Trump announced he was suspending tariffs.
The speed of the reversal highlights not only how sensitive precious metals markets are to geopolitical headlines, but also how quickly sentiment can change when tail risks are removed.
The divergence between Bitcoin’s rally and gold’s decline reinforces the theory that Bitcoin trades as a risk asset rather than a digital safe haven during macro shocks.
As uncertainty increased, Bitcoin sold off along with stocks. Once the uncertainty subsided, Bitcoin rose along with stock prices and gold sold off. Its correlation structure is important for portfolio construction and understanding how Bitcoin fits into broader macro flows.
what happens next
Resolving the tariff threat on February 1 removes one short-term impasse, but the underlying Greenland negotiations remain unresolved.
President Trump’s post suggests talks are ongoing and that the threat of tariffs could resurface if talks stall. This leaves some headline risk, especially if the administration uses trade policy as a lever for future negotiations.
The key takeaway for Bitcoin is that during periods of geopolitical uncertainty, macro headlines drive more volatility than crypto-specific fundamentals.
The whipsaw on January 21st shows how quickly sentiment can reverse. Still, this shows how much leverage is embedded in the derivatives market and how willing traders are to position themselves in both directions despite the risks.
(Tag translation) Bitcoin
