When I updated my Linux kernel to 5.11 I had the bad surprise to end up with a blinking underscore on reboot. It had been many years since an update had broken my system like that. I fixed it rather easily by booting in rescue mode and downgrading the kernel. I had no time to investigate so I just added linux to IgnorePkg at the time, But I don’t use Arch to run old kernels so today I took the time to fix it “properly”.
To do so, I reproduced the issue, then downgraded again and looked at the logs with journalctl -b --boot=-1. It quickly let me understand that it was GDM that was failing due to something wrong with graphics initialization.
To keep things short, let me skip to the conclusion: if you run into this issue on an old-ish Dell XPS with an Intel Iris Plus 640 graphics card like mine with GDM, Arch and Wayland (or something similar), try enabling early KMS by adding i915 to the MODULES array in mkinitcpio.conf and rebuilding the initramfs, that fixed it for me.