TLDR
A US tariff reversal on Europe linked to the Greenland dispute sparked a relief rally in crypto but also wiped out many leveraged traders.
- Trump scrapped planned EU tariffs, easing trade war fears and lifting risk appetite across stocks and crypto.
- Bitcoin bounced from about 87,000 to near 90,000 dollars, while 24-hour crypto liquidations reached roughly 600 million to 1 billion dollars.
- The move looks like a macro-driven rebound, with inflation, bond yields, and still-heavy leverage likely to keep volatility high.
Deep Dive
1. What The Tariff U-Turn Was
Trump had threatened new US tariffs on several European countries if they did not support his Greenland plans, rattling global markets and hitting risk assets, including crypto.
After a meeting with NATO Secretary General Mark Rutte at Davos, he announced a framework for an Arctic deal and said he would not impose the Europe tariffs that were due on 1 February, easing fears of an escalating trade war and sending equities sharply higher. Stocks and crypto rallied together as this reversal boosted risk appetite in what outlets described as a tariff-driven relief move for Bitcoin and major altcoins.The Defiant and Crypto.news both frame the rebound as directly tied to the tariff reversal.
Crypto is still trading like a macro risk asset, reacting quickly to geopolitical de?escalation.
2. Size Of The Rebound And Liquidations
On the day of the reversal, Bitcoin (BTC) briefly dipped below 88,000 dollars before rebounding toward 90,000 dollars, with majors like Ethereum (ETH), Solana (SOL), XRP and others posting 1 to 4 percent gains.The Defiant reports total crypto market cap up about 1.1 percent, which aligns with aggregate data showing roughly a 1.3 to 1.4 percent 24?hour rise.
The sharp intraday swing punished leveraged traders. Estimates put 24?hour liquidations between roughly 600 million and over 1 billion dollars, with one analysis citing about 625 million dollars split unusually evenly between long and short positions as prices first dumped then snapped back.CoinDesk and other outlets note a single 40 million dollar ETH position as the largest forced close, and exchanges like Binance and Bybit each saw around 100 million dollars in liquidations.
Fast macro headlines plus high leverage created a classic whipsaw where both bears and bulls were liquidated.
3. What Could Move Crypto Next
Several analysts call the move a relief bounce rather than a clean trend change, highlighting that crypto remains sensitive to the broader macro backdrop rather than just tariffs.
Even as tariff worries eased, economists warn that sticky US inflation and higher-for-longer interest rates could cap risk appetite for Bitcoin and altcoins, with research cited by Coinspeaker suggesting consumer prices could run above 4 percent in 2026 and rate cuts may be delayed.Coinspeaker
Overall, total crypto market cap is around 3.04 trillion dollars with fear?zone sentiment and elevated derivatives open interest, indicating that leverage is still significant and macro shocks can quickly translate into large liquidations.
The immediate tariff risk has faded, but crypto traders are still in a macro-driven, leveraged environment where inflation data, bond yields, and renewed policy headlines could easily spark the next big move.
Conclusion
The tariff U-turn removed one near-term geopolitical overhang, letting crypto rebound alongside global equities, but the same reversal exposed how tightly Bitcoin and altcoins remain coupled to macro news. With leverage still high and inflation and rates in focus, the setup favors continued volatility driven more by policy and bond markets than by crypto-native developments alone.
CoinsKid.Com