Archax Weekly Market Update, Jan 20, 2026

Crypto opens the week under pressure, with Bitcoin trading around $93,000 and Ethereum near $3,200, as markets reprice renewed geopolitical and trade-driven uncertainty. The tone across risk assets has become more defensive, with crypto once again behaving like the high-beta expression of broader sentiment rather than trading on idiosyncratic fundamentals.

A key driver of the latest wobble has been President Trump’s renewed push to use tariffs as a lever of foreign policy. Over the past week, he has threatened and begun outlining additional tariff measures aimed at European allies, tying them explicitly to security and strategic cooperation in the Arctic. The messaging is important because it shifts the tariff narrative away from traditional trade disputes and toward geopolitics, increasing the risk of retaliation and a more persistent drag on global confidence.

The flashpoint is Greenland. Trump has intensified his long-running campaign to bring the territory under US control, framing Greenland as central to national security and Arctic dominance. European leaders have responded by emphasising Greenland’s right to self-determination and Denmark’s sovereignty, while warning that trade threats risk escalating tensions inside NATO. In practical terms, this has created an unusual mix of market concerns: a geopolitical dispute involving a strategic region, paired with tariffs that could ripple into supply chains and inflation dynamics.

Markets are sensitive to this because tariffs are inflationary at the margin, even when growth is already slowing. If tariff threats turn into sustained policy, they risk complicating the path for central banks that are attempting to ease without reigniting price pressures. That matters for crypto because the asset class has benefitted most when policy can remain accommodative and liquidity improves without inflation forcing a reversal. The concern now is not that policy becomes restrictive again, but that uncertainty around trade and geopolitics suppresses risk-taking even as liquidity conditions quietly improve.

On that front, the underlying liquidity picture is still constructive. The Fed’s ongoing reserve management operations continue to support short-term funding conditions, easing pressure in parts of the plumbing that matter for broader financial conditions. Historically, this type of incremental liquidity improvement tends to support risk assets, but often only once volatility stabilises and investors regain confidence to add exposure. In the current environment, that confidence remains fragile.

This is where the balance of forces becomes clear. Liquidity is improving, but the market is becoming more selective about when and where risk is taken. Geopolitical shocks such as Greenland and the tariff narrative add another layer of hesitation, reinforcing the cautious positioning already visible across equities and credit. For crypto, that combination typically produces choppy, headline-driven price action, where we’ve seen rallies struggle to extend and downside moves can accelerate quickly during thin liquidity windows.