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January 21st, the crypto world experienced a dramatic reversal. Trump suddenly announced the cancellation of the planned 10% tariffs on 8 European countries scheduled for February 1st. The moment the news broke, the market reacted extremely quickly—Bitcoin surged straight up, briefly breaking $90,300, rebounding over 3% from the intraday low; Ethereum's rally was even more vigorous, bouncing from a low of $2,870 to $3,060, an increase of nearly 7%. The entire crypto market staged a classic V-shaped reversal.
Behind this rally lies a clear political signal. After meeting with NATO Secretary General at the Davos Forum, Trump proposed the so-called "Greenland Agreement Framework." According to official statements, this involves an agreement on defense system deployment and mineral development rights. US-EU trade tensions have thus temporarily eased.
Comparing this to the scene a week ago highlights how sensitive the market is. At that time, Trump had just issued strong words about tariffs, and the crypto market was in a state of panic. Funds were fleeing wildly in search of safe havens, with Bitcoin dropping below $87,000 and Ethereum hitting a nearly one-month low. In just a few days, the extreme market sentiment completely reversed.
Why does macro policy have such a direct impact on crypto assets? The core reason is that cryptocurrencies like Bitcoin and Ethereum are inherently high-risk assets. When geopolitical tensions worsen or global trade wars escalate, economic uncertainty spikes. In such an environment, investors tend to sell high-volatility assets first to cut losses, shifting funds into traditional safe havens like gold and the US dollar. Once risks subside and risk appetite recovers, capital flows back into the crypto market, driving prices up. This logic has been particularly evident recently.
However, experienced traders know that such policy reversals are often unpredictable. The so-called "agreement framework" has not even been formalized into an official document, and Denmark has explicitly stated it will not discuss Greenland sovereignty issues. If subsequent negotiations encounter setbacks, tariff threats could resurface at any time. How long this crypto rebound can last largely depends on the actual progress of US-EU trade negotiations. In the short term, market risk appetite is indeed recovering, but the long-term policy direction still requires close observation.