Bitcoin values are bouncing back as gold declines due to an unexpected “framework agreement” that has eliminated the tariff risk.

President Donald Trump's declaration that he would refrain from implementing tariffs set for Feb. 1 caused a swift turnaround in risk assets, with Bitcoin bouncing back above $90,000 after dipping to $87,300 earlier in the day.

This action reversed a significant two-day selloff prompted by concerns over a trade war linked to Trump’s Greenland ambitions, reaffirming Bitcoin’s role as a high-beta macro asset that magnifies directional fluctuations when geopolitical news changes rapidly.

Gold and silver fell sharply following the announcement, indicating a resurgence of risk-on sentiment. Gold dropped from approximately $4,850 to $4,777 per ounce, while silver decreased from about $93 to $90.60 per ounce. However, both metals managed to recover around 1% overnight, while Bitcoin remained stable close to $90,000.

The safety-seeking demand that had bolstered precious metals during the tariff scare faded as traders shifted back towards risk assets.

At the time of reporting, Bitcoin was trading at $90,213.45, up 2.1% in one hour and 2% for the day. CoinGlass data indicates that the rebound triggered $160 million in short liquidations within just one hour, raising total liquidations on Jan. 21 to over $1 billion across both long and short positions.

Bitcoin's rebound led to $203 million in shorts being liquidated in one hour, contributing to a total of over $1 billion in liquidations across all positions on Jan. 21.

How Greenland became a tariff threat

Over the weekend and into the beginning of the week, Trump’s campaign to acquire Greenland transformed into a trade-war-style threat. He announced additional tariffs on products from several European nations starting Feb. 1, with escalating language linked to finalizing a Greenland deal.

This framing turned an unusual geopolitical situation into a tangible risk-off catalyst. Equities declined, the dollar strengthened, and Bitcoin fell below $92,000 as traders reassessed tail risks surrounding a renewed trade conflict.

From Jan. 19 to 20, the tariff anxieties spread beyond cryptocurrency. A widespread selloff across risk assets caused Bitcoin to drop as much as 7% amid the shock. The pressure specific to crypto intensified as leveraged positioning exacerbated the decline.

CoinGlass liquidation data revealed ongoing long liquidations following a more significant burst earlier in the week, indicating that the market was fragile leading into the announcement.

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$87,000 to $90,000 in hours

Bitcoin's intraday range today varied from a low of $87,304 to a high of $90,379, a 3.5% fluctuation that highlights how swiftly sentiment can shift when macro headlines change direction.

The low occurred as European markets opened, amidst heightened tariff concerns. The recovery began after Trump posted on Truth Social that he had established “the framework of a future deal” with NATO Secretary General Mark Rutte concerning Greenland and the Arctic region, and that he would not enact the tariffs set for Feb. 1.

Trump announced he would not impose tariffs scheduled for Feb. 1 after reaching a framework deal with NATO on Greenland and the Arctic.

The timing of the bounce was precise. Within an hour of the post, Bitcoin had reclaimed $90,000, and short positions began to get liquidated. The surge wasn't confined to cryptocurrency; equity futures rose, Treasury yields stabilized, and gold and silver reversed their safe-haven buying.

The events of the past few days resemble less a Bitcoin-only narrative and more of Bitcoin acting as a high-beta risk asset during a macro shock. Tariffs and geopolitical uncertainty affected equities, currencies, and interest rates, and Bitcoin followed suit.

Derivatives positioning exacerbated the downside when technical thresholds were breached, creating a feedback loop between spot price movements and forced liquidations.

The sharp recovery following the “no tariffs” announcement fits the same pattern in reverse. The macro headline eliminated tail risk, risk assets rebounded, and Bitcoin led the recovery.

This dynamic corroborates what institutional analysts have observed for months: Bitcoin increasingly behaves like a leveraged play on risk sentiment, especially during times of heightened macro uncertainty.

The magnitude of liquidations underscores the level of leverage present in the system. Over $1 billion in total liquidations occurred on Jan. 21 alone, divided between longs caught in the morning selloff and shorts compelled to cover during the afternoon rally, suggesting traders were positioned for continuation in both directions and got caught off guard when the narrative shifted.

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Risk-off unwind

Gold's decline from $4,850 to $4,777 per ounce and silver’s drop from $93 to $90.60 per ounce signified a distinct rotation away from safe-haven assets.

During the initial tariff scare, both metals had surged as investors sought to hedge against geopolitical risks and potential dollar weakness. When Trump declared that the tariffs were on hold, that demand dissipated.

The rapidity of the reversal emphasizes how sensitive the precious metals markets are to geopolitical news, as well as how swiftly sentiment can change when tail risks are alleviated.

The divergence between Bitcoin’s rebound and gold’s decline reinforces the narrative that Bitcoin behaves more like a risk asset than a digital safe haven during macro shocks.

When uncertainty spiked, Bitcoin sold off alongside equities. When the uncertainty was resolved, Bitcoin rallied with equities while gold declined. This correlation structure is important for portfolio management and for understanding how Bitcoin fits into broader macro trends.

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What comes next

The resolution of the Feb. 1 tariff threat alleviates one immediate concern, but the underlying Greenland discussions remain unresolved.

Trump’s post suggested that negotiations are still in progress, indicating the tariff threat could reemerge if those talks falter. This creates a degree of headline risk, particularly if the administration leverages trade policy in future negotiations.

For Bitcoin, the essential takeaway is that macro headlines exert a greater influence on volatility than crypto-specific fundamentals during periods of geopolitical uncertainty.

The Jan. 21 whipsaw illustrates how swiftly sentiment can reverse. Nonetheless, it also highlights the significant leverage still present in derivatives markets and how eager traders are to position aggressively in both directions despite that risk.

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