Trump’s Tariff Decision: What Bitcoin Could Signal

As President Donald Trump's February 1 tariff deadline on eight European nations looms, the market is experiencing a typical trader’s dilemma, where positions may be shaken up before a potential reversal.

Key Takeaways

Trump's February 1 tariff deadline has created market tensions.
Historical patterns suggest there's an 86% chance of some avoidance tactics before or shortly after the deadline.
Bitcoin's continuous trading allows it to respond quicker to market changes than traditional stocks.
The next 72 hours are critical in determining whether markets expect tariffs to be enacted.
Signs of diplomatic resolution could spur a swift rally in crypto markets.

This article outlines the intricate relationship between political announcements and cryptocurrency market movements, providing readers with an understanding of current dynamics.

Trump's Tariff Decision

Analysis from ChatGPT of past tariff situations involving Trump suggests there is an 86% chance of some form of avoidance tactic (like a pause, delay, exemption, or backtrack) occurring either before the tariffs are enacted or within a week after.

This creates a high-pressure environment in which Bitcoin's around-the-clock price fluctuations are likely to respond to the situation faster than traditional markets.

Following the tariff announcement, Bitcoin experienced a significant drop, leading to $875 million in crypto liquidations within a single day, reflecting a 3% decline to $92,000. Notably, 90% of forced liquidations impacted long positions across platforms such as Hyperliquid, Bybit, and Binance.

On January 17, 2026, at 11:19 AM EST, Trump announced via Truth Social that Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland would face a 10% tariff starting February 1, which would rise to 25% by June 1 “until a deal is reached for the complete and total purchase of Greenland.”

Understanding the Patterns Behind Tariff Decisions

ChatGPT’s exploration of Trump’s past tariff deadlines shows notable reversal tendencies.

When analyzed, outcomes can be categorized as reversal, softening, or no easing, with 86% of situations resulting in some form of resolution, such as complete cancellation, delays, exemptions, or partial reversals.

Breaking down the probabilities, there is a 58% likelihood that a resolution will occur before February 1, which includes a 29% chance for a full reversal and another 29% for softer measures like delays or exemptions.

According to Brian Jacobsen, chief economic strategist at Annex Wealth Management, “The fact that this threat was on social media instead of distilled into an executive order and it has a delayed implementation means a lot of investors might just decide to wait things out before overreacting,” as he noted to Bloomberg.

An illustrative example is the liquidation event that occurred on October 10.

Bitcoin Price Chart of October

During that time, the crypto markets experienced intense liquidations leading up to announcements, followed by significant volatility as traders adjusted their positions in light of the new policies. Once the actual tariff structure was clarified, the markets eventually stabilized, albeit amid considerable capital loss during the uncertainty.

Bitcoin's Real-Time Market Functionality

While stock markets close during the night and on holidays, Bitcoin continues to react actively, showcasing real-time sentiment.

This 24/7 availability positions the crypto market as the primary responder to major headline changes, particularly during the critical period from January 29 to February 1. Any hint of terms like “pause,” “delay,” “talks,” “exemptions,” “framework,” or “deal” has the potential to trigger a strong relief rally, with altcoins potentially responding even more dramatically than Bitcoin.

In fact, as explained by Farzam Ehsani, CEO of crypto exchange VALR, the mounting fears of a potential U.S.-EU tariff conflict, coupled with Trump’s confrontational trade stance, have forced the markets into a cautious mode amidst thin weekend liquidity.

“Thin weekend liquidity and leverage fumes amplified the decline’s impact, turning the pullback into a flash drop of nearly $4,000 in less than two hours and a cascade of liquidated positions worth over $780 million,” Ehsani stated.

“While investors rotated into traditional safe havens like gold, digital assets remained high-risk bets.”

Beyond tariff issues, the market is also facing broader vulnerabilities specific to cryptocurrencies.

In contrast with other risk assets such as the KOSPI, which remained steady or increased amid US-EU trade tensions, cryptocurrencies have continued to lag, with privacy coins being the only outliers.

The Critical 72-Hour Countdown

The time leading up to February 1 is crucial for traders anticipating either a market reversal or a further decline.

If no conciliatory language is issued in the 48 to 72 hours leading up to the deadline, it is likely that markets will begin to view the tariff threat as substantive, with Bitcoin reflecting market fears ahead of traditional assets.

European leaders have shown a united front against the tariffs, making it increasingly probable that Trump may retract his stance before the deadline.

UK Prime Minister Keir Starmer communicated to Trump that “applying tariffs on allies for pursuing the collective security of Nato allies is wrong,” while Swedish Prime Minister Ulf Kristersson asserted, “We will not let ourselves be blackmailed.”

Furthermore, French President Emmanuel Macron has suggested activating the EU's “trade bazooka,” an anti-coercive strategy aimed at restricting U.S. access and imposing significant constraints on American imports.

Germany's Bundeswehr has also conducted reconnaissance in Greenland as part of NATO's “Arctic Endurance” operation, aimed at fortifying the alliance's presence in the area.

Trump has interpreted these military maneuvers by European nations as aggressive, stating that they “journeyed to Greenland, for purposes unknown” and highlighted that this action introduces “a level of risk in play that is not tenable or sustainable.“

Despite Bitcoin's efforts to approach the $100,000 mark, the monetary policy outlook does not offer much hope for relief.

CME FedWatch tools indicate that investors are not anticipating the first significant rate cut until June 2026, indicating persistent tough financial conditions.

Target Rate Probabilities for 28 Jan 2026 Fed Meeting

Ehsani notes that “Clear signs of a reversal toward sustained growth are still lacking,” adding that the baseline expectation for Bitcoin and most altcoins is consolidation, absent new sources of liquidity.

At this point, the trading strategy for the next 72 hours remains binary.

If the last two days leading up to February 1 pass without any conciliatory messages from Washington, Bitcoin is expected to lead a market capitulation as fears about the tariffs become concrete.

Conversely, any news indicating a diplomatic thaw will quickly cause the markets to reprice, sparking a relief rally in Bitcoin and other cryptocurrencies while traders rush to adjust their previously defensive positions formed during the downturn.