Crisis Over? Crypto Market Outlook After Trump Abandons Greenland Taxes
Execution Summary
Trump did indeed suspend the planned 10% tariffs on eight European countries, scheduled for February 1st, and the cryptocurrency market subsequently rebounded from a low of $87,000 to above $90,000, but the rebound was significantly weaker than that of the stock market. The key question is: is this merely a technical rebound or a sustainable reversal?
Based on existing data analysis, the conclusion is that a short-term rebound is expected but its scope is limited, while the medium to long term remains constrained by macroeconomic uncertainties . The core reason for the lag in the performance of the crypto market compared to the stock market is the difference in market structure—the stock market benefits from a clear narrative of risk dissipation, while the crypto market still needs to digest the pressure of high-leverage liquidation and insufficient institutional inflows.
Key Event Timeline
| time | event | Market impact |
|---|---|---|
| 2026-01-17 | Trump announced a 10% tariff on eight European countries (effective February 1). | Risk assets generally declined, with BTC falling from $95,000. |
| 2026-01-20 | Market panic intensified, and BTC fell to a low of $87,000. | More than $1 billion in liquidations occurred in a single day, and the fear index fell to 21. |
| 2026-01-21 | Trump announced the Greenland Framework Agreement and suspended tariffs in Davos. | Global stock markets rebounded strongly, while the crypto market saw a modest recovery. |
| Evening of January 21, 2026 | BTC rebounds above $90,000 | The rebound was significantly weaker than the stock market. |
Market Status Analysis
Technical indicator assessment
BTC Technical Status (as of 2:00 UTC, January 22, 2026):
- Price : $90,036, a 3.5% rebound from the low of $87,000.
- RSI : 4h cycle 39.8 (weak), 1d cycle 45.1 (neutral)
- MACD : Both the 4-hour and 1-day charts show a death cross signal, but the histogram is narrowing.
- Bollinger Bands : Price is near the middle band, with short-term resistance at $94,424.
ETH technical status :
- Price : $3,025, slightly underperforming BTC
- RSI : 4h period 40.7, 1d period 43.7
- Key technical levels : Support at 2,900-3,000, resistance at 3,316.
On-chain valuation health
| index | numerical values | Signal | meaning |
|---|---|---|---|
| MVRV | 1.589 | Fair valuation | Price close to actual value |
| NUPL | 0.3706 | optimism | Unrealized profits accounted for 37%. |
| Realized Price | $56,243 | Strong support | Market average cost base |
| NVT | 25.0 | underestimate | The network value is relatively low compared to the transaction volume. |
On-chain data suggests that BTC is in a reasonable valuation range , with the realized price of $56,000 providing strong support. The current price being well above this level indicates that long-term holders are still in a profitable position.
Derivatives Market Sentiment
Leverage liquidation status (24 hours):
- Total liquidation : $229.5 million
- Long/Short Ratio : 0.72 (Short positions were liquidated more frequently)
- Total open interest : $120.78 billion (high activity level)
Funding rates : Neutral (0.00%), indicating that there is no extreme sentiment in the derivatives market.
Current derivatives data shows that short covering is the main driver of the rebound , rather than new long positions entering the market, which limits the sustainability of the rebound.
Substantive Analysis of the Greenland Accord
Agreement Content and Risks
The "Greenland Framework Agreement" announced by Trump has the following characteristics:
- Non-binding framework : This serves only as a basis for future negotiations, without a specific timetable or implementation details.
- Tariff suspension, not cancellation : It is explicitly stated that "based on this understanding, it will not be implemented for the time being," reserving the right to reinstate it.
- The negotiating team has been formed , led by Vice President Vance and Secretary of State Rubio; the process could be lengthy.
Key risk : The EU has halted trade agreement negotiations with the US and has prepared €93 billion in retaliatory measures. If the framework negotiations break down, the 25% tariffs could still be implemented on June 1st .
Market expectations validated
Forecast market data shows:
- Polymarket : The probability of the US gaining sovereignty over Greenland by 2026 is only 20%.
- Kalshi : 43.9% probability of completing the acquisition before January 2029.
Market participants adopted a "TACO" (Trump Always Chickens Out) trading strategy in response to Trump's tariff threats, expecting him to eventually back down, but this expectation itself increased market volatility.
Funds Flow Analysis
Institutional Fund Performance
Missing ETF flow data : The current data does not provide detailed ETF flows for the 87,000-90,000 rebound range, which is a key gap in assessing the quality of the rebound.
However, previous data showed that:
- The net inflow of BTC ETFs once reached $760 million in a single day.
- The weekly inflow of $1.4 billion indicates institutional interest.
Inference : Without large-scale ETF outflows, the current rebound may have been supported to some extent by institutions, but there is a lack of data to confirm this.
On-chain large transaction monitoring
Positive signs are emerging on the ETH chain:
- Trend Research borrowed 70 million USDT to buy 24,555 ETH (approximately $75.5 million).
- Other whales purchased 20,000 ETH (approximately $59 million) via OTC.
- Large purchases are made through OTC to reduce immediate selling pressure.
This suggests that institutional investors view prices below $3,000 as a buying opportunity , providing psychological support for ETH.
Macroeconomic risk assessment
Federal Reserve policy uncertainty
In Davos, Trump continued to criticize Federal Reserve Chairman Powell, calling him "stupid" and demanding interest rate cuts. This is an act of political interference in the independence of central banks.
- Increased policy uncertainty : Markets struggle to predict interest rate path
- Potentially driving up inflation expectations : Easing policies under political pressure may trigger inflation concerns.
- Weakening Confidence in the Dollar : Central Bank Independence is a Pillar of the Dollar's Reserve Currency Status
Global liquidity impact
The liquidity impact of the tariff mechanism :
- Studies show that 90% of tariff costs are borne by American consumers.
- This is equivalent to a hidden consumption tax, reducing disposable income.
- This suppresses liquidity in high-risk assets such as cryptocurrencies.
Even if tariffs are suspended, the very existence of this mechanism will suppress risk appetite .
Analysis of the performance differences between the crypto market and the stock market
| Dimension | Global stock markets | Crypto Market |
|---|---|---|
| rebound range | The Dow Jones Industrial Average rose 588 points, and the Nasdaq Composite rose 1.9%. | BTC +3.5%, ETH +2% |
| Sentiment Indicators | Risk appetite rebounds | Fear Index: 21 (Extreme Fear) |
| Driving factors | Risk Convergence Narrative | Short covering technical rebound |
| Nature of funds | Extensive capital inflows | Localized buying |
The root cause of the performance difference : Equities benefited from a clear "risk dissipation" narrative, while the crypto market still needs to digest it.
- Liquidation pressure from excessive leverage in the early stages
- Institutional fund inflows slowed
- Liquidity sensitivity as a high-risk asset
Investment Prospects and Risk Matrix
Short-term outlook (1-4 weeks)
Positive factors :
- Technical oversold correction needed
- Short covering momentum continues
- Institutions show signs of buying at low levels
Risk factors :
- The fear still needs time to heal.
- Uncertainty surrounding Greenland negotiations
- Federal Reserve policy interference
Reasonable range : BTC fluctuates between $88,000 and $95,000.
Medium-term outlook (1-3 months)
| Scene | probability | target position | Key Driver |
|---|---|---|---|
| optimism | 30% | 100,000-105,000 | The Greenland Agreement was reached, and the Federal Reserve cut interest rates. |
| neutral | 50% | 85,000-95,000 | The status quo remains unchanged, but volatility is decreasing. |
| pessimistic | 20% | 75,000-80,000 | Tariffs reinstated, liquidity deteriorates |
Key monitoring indicators
- BTC ETF Daily Flow : Institutional Fund Movements
- Fear & Greed Index : Degree of Market Sentiment Recovery
- Greenland Negotiations Progress : No Substantive Agreement Before February 1st
- Federal Reserve Remarks : Powell's Response to Political Pressure
Conclusions and Recommendations
Key takeaway : Trump's tariff suspension provided a respite, but the sustainability of the crypto market rebound remains a challenge.
Judgment of the nature of the rebound : The current rebound is mainly driven by technical rebound and short covering , rather than by new capital inflows due to fundamental improvement.
Trading strategy recommendations :
- Short-term traders : can trade within the 88,000-92,000 range, setting a stop-loss below 87,000.
- Medium- to long-term investors : Wait for a better entry point, ideally in the 85,000-88,000 range.
- Risk-averse investors : Wait and see until the Greenland agreement yields a clear result or the fear index returns to above 40.
Final assessment : The crypto market can partially follow the stock market rebound, but the magnitude and sustainability will be significantly weaker than traditional risk assets . Unless we see sustained institutional inflows and a complete resolution to the Greenland crisis, the upside potential above $90,000 is limited.
The true turning point for the market awaits: ① a complete resolution of the Greenland crisis; ② clarity on Federal Reserve policy; and ③ completion of the crypto market's own leverage clearing. Currently, none of these three conditions are fully met, so a cautiously optimistic approach is advised.