Market volatility follows political developments
Bitcoin experienced another day of significant price swings, but this time the movement was upward. The cryptocurrency had been trading lower earlier in the session, dropping to around $88,000 at one point. Then something shifted.
President Trump posted on Truth Social about what he called a “very productive meeting” with NATO Secretary General Mark Rutte. In that post, he mentioned they had formed “the framework of a future deal” regarding Greenland and the Arctic region. More importantly for markets, he then stated he would not be imposing the threatened tariffs on EU nations that were scheduled to take effect on February 1.
Immediate market reaction
Almost immediately after the announcement, Bitcoin shot back above $90,000. It had been bouncing around quite a bit—first slumping to $88,000, then rising above $90,000, then falling again to nearly $87,000. The tariff cancellation news seemed to provide the catalyst for a more sustained move upward.
I think what’s interesting here is how sensitive crypto markets have become to traditional geopolitical news. A few years ago, Bitcoin might not have reacted so strongly to tariff announcements. Now it seems to move in sync with broader risk assets.
Broader market movements
The reaction wasn’t limited to cryptocurrency. U.S. stocks also pushed to session highs following the news. The Nasdaq and S&P 500 each climbed about 1.3%. That’s a significant move for a single session, especially considering the context of ongoing trade tensions.
Precious metals, which had been seeing strong buying pressure as trade tensions increased, gave up their earlier gains. Gold returned to flat for the session at $4,770 per ounce. This makes sense—when trade tensions ease, the safe-haven appeal of gold tends to diminish somewhat.
What this means for crypto markets
It’s becoming clearer that Bitcoin and other cryptocurrencies are increasingly tied to broader macroeconomic developments. The tariff threat cancellation removed a major uncertainty hanging over markets. Investors had been concerned about potential retaliatory measures and the impact on global trade.
But I should note—this volatility works both ways. While today’s move was positive, the same sensitivity to news could lead to sharp declines if future developments are perceived negatively. The $90,000 level seems to be acting as both resistance and support, with Bitcoin bouncing around it repeatedly throughout the session.
What’s perhaps most telling is how quickly the market digested this information. Within minutes of the Truth Social post, prices adjusted. That speed of reaction suggests markets are highly attuned to political developments that might affect economic conditions.
The relationship between geopolitical events and cryptocurrency prices appears to be strengthening. Whether this is a permanent feature of crypto markets or just a phase remains to be seen. For now, traders are watching political developments as closely as they’re watching technical indicators.
