On Monday morning, the market did that factor it all the time does when politics stops being background noise and begins grabbing the steering wheel.
Screens went crimson, chats stuffed with the identical half-jokes about “macro,” and Bitcoin slipped again beneath the psychological ranges merchants had simply spent the weekend defending. The headline danger had a well-known scent, tariffs, allies, a menace timed for max consideration, and simply sufficient ambiguity to maintain leverage on edge.
This time the spark got here from Greenland.
Over the weekend, President Donald Trump escalated his stress marketing campaign towards European allies who oppose U.S. efforts to accumulate the territory, floating a 10% tariff that may start on February 1, with a menace to lift it additional later this yr.
By Monday, markets had been not treating it as an offhand comment. U.S. futures slid, European indices fell, and the story mutated from geopolitical theatre into an actual commerce shock that would spill throughout danger belongings.
For crypto merchants, the temper shift felt private. Loads of desks nonetheless keep in mind October, when tariff headlines helped set off one of many nastiest liquidation cascades of the cycle, the sort that empties out leverage and leaves even good positions wanting silly for 48 hours.
That reminiscence has been sitting quietly within the background, ready for the following excuse.
Then the excuse arrived, with a letter.
In Davos, BBC’s protection and wider reporting circulated that Trump despatched a notice to Norway’s prime minister linking Greenland to the Nobel Peace Prize, suggesting that, as a result of he had not been awarded the prize, he might justify taking a more durable posture.
The textual content of the message additionally moved via diplomatic channels, in accordance with reporting attributed to a number of officers.
Expensive Jonas: Contemplating your Nation determined to not give me the Nobel Peace Prize for having stopped 8 Wars PLUS, I not really feel an obligation to assume purely of Peace, though it can all the time be predominant, however can now take into consideration what is sweet and correct for america of America. Denmark can not defend that land from Russia or China, and why have they got a “proper of possession” anyway? There aren’t any written paperwork, it’s solely {that a} boat landed there a whole bunch of years in the past, however we had boats touchdown there, additionally. I’ve completed extra for NATO than every other particular person since its founding, and now, NATO ought to do one thing for america. The World isn’t safe except we now have Full and Complete Management of Greenland. Thanks! President DJT.
It sounded ridiculous, but it landed with weight as a result of officers verified it was actual, and it gave markets one thing they hate: a story that may escalate with out warning.
That’s the half that issues.
The “tariff cycle” and the Greenland episode
Again in October, a submit from The Kobeissi Letter laid out what it known as an investor playbook for tariff episodes, a rinse-and-repeat sequence of cryptic threats, panic promoting, weekend rhetoric, a Sunday evening futures pop, and the gradual crawl towards a deal that lets markets breathe once more.
| Step | What occurs | What to look at for |
|---|---|---|
| 1 | Trump posts a cryptic tariff warning aimed toward a rustic or sector, markets drift decrease | Imprecise language, no numbers but, danger belongings soften, crypto funding begins to chill |
| 2 | Trump pronounces a big tariff price, markets unload onerous, weak positions get shaken out | A particular proportion, rapid spike in volatility, liquidations improve |
| 3 | Dip patrons step in, a head-fake rally kinds, then recent lows seem, good cash begins shopping for | Bounce on low conviction, then a second leg down with higher bid help |
| 4 | After Friday’s shut, Trump doubles down on tariffs to use stress | Weekend escalation, posts or statements timed after market hours |
| 5 | On Saturday, the tariff goal responds or feedback | Official rebuttals, retaliation discuss, counter-tariff hints |
| 6 | On Sunday, earlier than futures open, Trump posts that he’s engaged on an answer | “Engaged on it,” “productive talks,” “deal doable,” softening language |
| 7 | Futures open sharply larger Sunday night, then lose momentum into Monday’s open | Hole up at 6pm ET, fade into money open, uneven risk-on try |
| 8 | After Monday’s open, Treasury Secretary Bessent seems on reside TV and reassures buyers | Media hit from Treasury, tone and phrasing matter, reassurance vs justification |
| 9 | Over the following 2–4 weeks, administration officers tease a commerce deal | “Framework,” “constructive,” “ongoing talks,” leaks to pleasant shops |
| 10 | Trump pronounces a brand new commerce deal, shares hit a file excessive | Photograph-op announcement, reduction rally, danger belongings re-rate larger |
| 11 | Cycle repeats from Step #1 | New goal, new sector, identical sequence of headlines and volatility |
The query at this time is straightforward, the place are we in that loop now, and does the loop even maintain up?
In case you strip out the social media bravado and take a look at the form of the week, Greenland matches the early a part of the Kobeissi framework virtually too cleanly.
Friday introduced the preliminary menace, Trump saying he might hike tariffs on international locations that refuse to “associate with” the Greenland push.
Over the weekend, the menace hardened into specifics, a ten% tariff starting February 1, aimed toward eight European international locations, with a path to the next price later within the yr if there is no such thing as a deal.
The goal international locations pushed again, and the backlash turned a part of the commerce story, not a aspect notice.
In London, Prime Minister Keir Starmer warned {that a} commerce battle is in nobody’s curiosity, and defended Greenland’s proper, alongside Denmark, to find out its personal future. Throughout Europe, officers mentioned retaliation instruments and the way far they had been keen to go if the tariffs moved from menace to coverage.
Then, on Monday, the diplomatic curveball was delivered: the Nobel letter, which widened the story from a tariff spat right into a query about intent and credibility.
On the identical time, the market tape refused to play together with the best a part of Kobeissi’s “playbook.”
The mannequin assumes that by Sunday night the White Home tends to dangle an answer, and futures soar, solely to fade into the Monday open. That pop is the stress launch valve.
We didn’t get that.
As an alternative, U.S. futures, and subsequently Bitcoin, sank into Monday on the tariff menace.
That’s why, for those who’re forcing this Greenland episode right into a numbered step, the cleanest reply is that we’re nonetheless sitting within the “goal responds” part, the a part of the cycle the place allies push again, officers posture, and markets commerce the uncertainty.
In different phrases, Step 5 vitality.
There’s a element that complicates it additional, Treasury Secretary Scott Bessent did seem on TV, which in Kobeissi’s sequence is the second the administration reassures buyers after the Monday open.
However the reporting round Bessent at this time is extra about justification than reassurance, arguing that Europe is simply too weak to ensure Greenland’s safety. That form of message extends the standoff, it doesn’t calm it.
So sure, the “Treasury on TV” second confirmed up, the calming perform didn’t.
What crypto merchants noticed, and why it mattered
Bitcoin doesn’t want a geopolitical cause to be unstable, it could possibly do this by itself, however it reacts badly when the world shifts into risk-off mode and leverage is leaning the fallacious approach.
On Monday, Bitcoin slid to round $92,500 in early buying and selling because the tariff menace hit sentiment. The transfer was a pointy, quick drop that took a number of thousand {dollars} off the worth in a brief window.
Whether or not you name it concern or positioning, what merchants had been actually responding to was the sensation that the state of affairs had no off-ramp but.
That’s the reason the October comparability retains coming again. In October 2025, tariff headlines round China helped set off a brutal unwind that merchants nonetheless reference because the second the market realized, once more, how fragile leverage might be.
At present’s promoting is smaller in magnitude, and the market construction is totally different, however the emotional sample rhymes, merchants see a headline that may develop, they keep in mind what liquidation appears to be like like, and so they begin trimming danger earlier than another person forces them to.
Does the thesis maintain up
Kobeissi framed the tariff cycle as an “precise playbook.” Greenland is a stress check for that declare.
The thesis holds up as a option to describe how fashionable markets digest Trump’s tariff drama, first the menace, then the panic, then the weekend amplification, then the scramble for a “resolution” headline that lets positioning rebuild.
It breaks down when it pretends the de-escalation all the time arrives on time.
Greenland has not supplied that clear de-escalation beat but, primarily as a result of the subject material is a rustic’s sovereignty quite than pure macroeconomics.
As an alternative, the narrative escalated right into a diplomatic letter that European leaders are taking severely, and the administration’s messaging, together with through Bessent, has leaned onerous into justification.
That issues as a result of markets commerce the trail, not the punchline. A playbook constructed round a predictable Sunday-night reduction rally is determined by somebody selecting reduction.
Proper now, the stress is the purpose.
The label for this second, and the 2 triggers to look at
The cleanest label for Monday is straightforward.
Escalation with out the Sunday off ramp.
If the cycle goes to snap again into one thing acquainted, the off-ramp has to look after the actual fact, as a result of the Sunday futures second has already come and gone, and it got here within the fallacious path. futures
From right here, two issues matter.
- A reputable de-escalation sign within the subsequent few days, one thing particular, not vibes, not “we’re serious about it,” an actual line about talks, delays, scope modifications, or situations that soften the February 1 path. Markets can reside with battle, they battle with open-ended timelines.
- The tape has to verify that the panic has peaked. That appears like a reversal that holds via the U.S. money session, with danger belongings stabilising as an alternative of whipsawing, and crypto cooling off with out one other compelled unwind. You do not want a rally to know leverage is clearing, you want value motion that stops behaving like it’s one headline away from breaking.
If we do get the traditional “Sunday evening reduction” transfer, it won’t be the one we simply missed, it will likely be the following one, the following weekend the place an answer headline arrives earlier than futures open and provides merchants permission to reprice the danger.
Till then, we’re within the part the place headlines do the harm, and the market spends the remainder of the day making an attempt to work out whether or not the harm is momentary.
For anybody who lived via October’s liquidation shock, that call by no means feels summary. It seems like a finger hovering over the shut button, and a timeline which may change with one submit, one interview, or one letter that feels like parody and arrives as coverage. letter
