Trump deviated from his tariff threat strategy for the first time, leading to Bitcoin missing the Sunday night relief rally.

On Monday morning, the market exhibited its usual behavior when political issues transition from mere background noise to taking control.

Displays turned red, discussions were filled with familiar half-jokes about “macro,” and Bitcoin fell back below the psychological thresholds traders had defended over the weekend. The headline risk carried a familiar aroma: tariffs, allies, a threat strategically timed for maximum visibility, and just the right amount of ambiguity to keep leverage unsettled.

This time, the ignition point was Greenland.

During the weekend, President Donald Trump intensified his pressure campaign against European partners who resist U.S. attempts to acquire the territory, proposing a 10% tariff set to take effect on February 1, with the possibility of an increase later this year.

By Monday, markets were no longer viewing it as a casual remark. U.S. futures dropped, European indices declined, and the narrative transformed from geopolitical drama into a tangible trade shock that could impact risk assets.

For cryptocurrency traders, the change in sentiment felt very personal. Many trading desks still recall October, when tariff announcements contributed to one of the most severe liquidation cascades in the cycle, leaving even solid positions appearing foolish for 48 hours.

This recollection had been quietly lingering, waiting for the next trigger.

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Then the reason arrived, delivered in a letter.

In Davos, BBC’s coverage and broader reports indicated that Trump sent a note to Norway’s prime minister linking Greenland to the Nobel Peace Prize, implying that, since he had not received the prize, he justified adopting a firmer stance.

The contents of the message also circulated through diplomatic channels, according to reports credited to several officials.

Dear Jonas: Given that your country chose not to award me the Nobel Peace Prize for having stopped 8 wars plus, I no longer feel obliged to think solely of peace, although it will always remain primary, but can now consider what is beneficial and right for the United States of America. Denmark cannot defend that land from Russia or China, and why do they have a “right of ownership” anyway? There are no written documents; it’s just that a boat landed there centuries ago, but we had boats landing there as well. I have done more for NATO than anyone else since its inception, and now NATO should do something for the United States. The world is not secure unless we have complete and total control of Greenland. Thank you! President DJT.

Donald Trump President (47th) • United States of America Share on View Profile

It sounded absurd, yet it carried weight because officials confirmed its authenticity, providing markets with something they detest: a narrative that can escalate unexpectedly.

That is the crucial aspect.

The “tariff cycle” and the Greenland situation

Back in October, a post from The Kobeissi Letter outlined what it termed an investor playbook for tariff incidents, a repetitive sequence of cryptic threats, panic selling, weekend rhetoric, a Sunday night futures surge, and a gradual approach toward a deal that allows markets to regain composure.

Step	What happens	What to watch for
1	Trump posts a cryptic tariff warning aimed at a country or sector, markets drift lower	Vague language, no numbers yet, risk assets soften, crypto funding starts to cool
2	Trump announces a large tariff rate, markets sell off hard, weak positions get shaken out	A specific percentage, immediate spike in volatility, liquidations increase
3	Dip buyers step in, a head-fake rally forms, then fresh lows appear, smart money starts buying	Bounce on low conviction, then a second leg down with better bid support
4	After Friday’s close, Trump doubles down on tariffs to apply pressure	Weekend escalation, posts or statements timed after market hours
5	On Saturday, the tariff target responds or comments	Official rebuttals, retaliation talk, counter-tariff hints
6	On Sunday, before futures open, Trump posts that he is working on a solution	“Working on it,” “productive talks,” “deal possible,” softening language
7	Futures open sharply higher Sunday evening, then lose momentum into Monday’s open	Gap up at 6pm ET, fade into cash open, choppy risk-on attempt
8	After Monday’s open, Treasury Secretary Bessent appears on live TV and reassures investors	Media hit from Treasury, tone and phrasing matter, reassurance vs justification
9	Over the next 2–4 weeks, administration officials tease a trade deal	“Framework,” “constructive,” “ongoing talks,” leaks to friendly outlets
10	Trump announces a new trade deal, stocks hit a record high	Photo-op announcement, relief rally, risk assets re-rate higher
11	Cycle repeats from Step #1	New target, new sector, same sequence of headlines and volatility

The question today is straightforward: where do we currently stand in that cycle, and does the cycle even hold?

If you eliminate the social media bravado and examine the week’s progression, Greenland aligns with the initial stages of the Kobeissi framework almost too perfectly.

Friday introduced the initial threat, with Trump indicating he might increase tariffs on countries that refuse to “go along with” the Greenland initiative.

Over the weekend, the threat solidified into specifics, a 10% tariff starting on February 1, directed at eight European nations, with a potential for a higher rate later in the year if an agreement is not reached.

The targeted countries responded, making the backlash part of the trade narrative rather than a mere footnote.

In London, Prime Minister Keir Starmer cautioned that a trade war benefits no one and defended Greenland’s right, alongside Denmark, to decide its own future. Across Europe, officials discussed retaliation measures and their willingness to act if the tariffs shifted from threat to enforcement.

Then, on Monday, the diplomatic twist arrived: the Nobel letter, which expanded the narrative from a tariff dispute to a question of intent and credibility.

At the same time, the market’s behavior did not conform to the most favorable aspect of Kobeissi’s “playbook.”

The model assumes that by Sunday evening, the White House typically offers a potential solution, causing futures to surge, only to fade by Monday’s opening. That surge acts as a pressure relief valve.

However, that did not happen.

Instead, U.S. futures and subsequently Bitcoin declined as Monday approached the tariff threat.

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That’s why, if you were to categorize this Greenland incident into a numbered step, the most accurate conclusion is that we are still in the “target responds” phase, where allies push back, officials position themselves, and markets navigate the uncertainty.

In other words, we’re experiencing Step 5 energy.

There’s an additional detail that complicates matters: Treasury Secretary Scott Bessent did appear on television, which in Kobeissi’s sequence signifies the administration reassuring investors after Monday’s opening.

However, the coverage surrounding Bessent today leans more towards justification than reassurance, asserting that Europe is too weak to ensure Greenland’s security. This type of message prolongs the standoff rather than alleviating it.

So indeed, the “Treasury on TV” moment occurred, but the calming effect was absent.

What crypto traders observed, and why it was significant

Bitcoin does not require a geopolitical catalyst to exhibit volatility; it can do that independently, but it reacts unfavorably when the environment shifts into risk-off mode and leverage is misaligned.

On Monday, Bitcoin dropped to around $92,500 during early trading as the tariff threat impacted sentiment. The movement was a sharp, rapid decline that wiped several thousand dollars off the price in a brief period.

Whether you label it fear or positioning, what traders truly reacted to was the sense that no off-ramp had yet emerged.

That is why the comparison to October keeps resurfacing. In October 2025, tariff news related to China instigated a brutal unwind that traders still reference as the moment the market was reminded of how precarious leverage can be.

Today’s decline is less severe, and the market structure is different, but the emotional pattern resonates; traders see a headline that could escalate, they recall what liquidation looks like, and they begin to reduce risk before someone else forces their hand.

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Does the hypothesis withstand scrutiny?

Kobeissi depicted the tariff cycle as an “exact playbook.” Greenland acts as a stress test for that assertion.

The hypothesis holds as a framework for describing how contemporary markets react to Trump’s tariff drama, beginning with the threat, followed by panic, then weekend amplification, and finally the rush for a “solution” headline that permits repositioning.

It falters when it assumes that de-escalation will always occur promptly.

Greenland has not yet provided that tidy de-escalation beat, primarily because the topic concerns a nation’s sovereignty rather than mere macroeconomics.

Instead, the narrative has escalated into a diplomatic letter that European leaders are taking seriously, and the administration’s messaging, including remarks from Bessent, has leaned heavily into justification.

That is significant because markets react to the trajectory, not just the conclusion. A playbook reliant on a predictable Sunday-night relief rally requires someone to choose to provide relief.

Currently, the pressure is the focus.

The label for this moment, and the two triggers to monitor

The most straightforward label for Monday is simply.

Escalation without a Sunday off-ramp.

If the cycle is to revert to something familiar, the off-ramp must materialize retroactively, as the Sunday futures moment has already passed, and it occurred in the unfavorable direction.

From here, two elements are crucial.

1. A credible de-escalation indication in the coming days, something specific, not vague, not “we’re considering it,” a genuine statement regarding discussions, delays, scope alterations, or conditions that soften the February 1 trajectory. Markets can manage conflict but struggle with open-ended timelines.
2. The market behavior must confirm that the panic has reached its peak. This would manifest as a reversal that holds through the U.S. cash session, with risk assets stabilizing rather than oscillating, and cryptocurrency cooling off without another forced liquidation. You don’t need a rally to indicate that leverage is being cleared; you need price movement that stops acting like it’s one headline away from breaking.

If we do experience the classic “Sunday night relief” movement, it won’t be the one we just missed; it will be the next one, the subsequent weekend where a solution headline arrives before futures open and grants traders the opportunity to re-evaluate the risk.

Until then, we remain in a phase where headlines inflict damage, and the market spends the day attempting to determine whether the damage is temporary.

For anyone who experienced October’s liquidation shock, that decision never feels abstract. It resembles a finger hovering over the close button, and a timeline that could shift with one post, one interview, or one letter that sounds satirical yet arrives as policy. letter

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