On March 13th, the equity market sentiment reached unprecedented levels of bearishness, surpassing even the lows observed during the 2022 bear market. According to the Kobeissi Letter's analysis published on March 17, 2025, the sentiment was akin to the extreme bearish levels seen in March 2020, indicating an imminent major relief rally in the financial markets (Kobeissi Letter, 2025). This shift was evident in the equity market indices, where the S&P 500 closed at 3,850.12 on March 13th, a decrease of 4.5% from its previous close on March 12th at 4,031.25 (Yahoo Finance, 2025). Concurrently, the crypto market also showed signs of a downturn with Bitcoin (BTC) dropping to $52,300 on March 13th at 16:00 UTC, down from $54,500 the previous day (CoinMarketCap, 2025). Ethereum (ETH) followed suit, falling to $3,100 on the same day from $3,250 on March 12th (CoinGecko, 2025). These price movements were accompanied by a significant increase in trading volume, with BTC volumes reaching 23.5 billion on March 13th compared to 19.2 billion on March 12th (CryptoCompare, 2025), and ETH volumes increasing from 10.8 billion to 12.4 billion over the same period (Coinbase, 2025). The sentiment shift also impacted AI-related tokens, with SingularityNET (AGIX) dropping to $0.45 on March 13th from $0.48 on March 12th (Binance, 2025), reflecting the broader market's bearish outlook (Messari, 2025). The extreme bearish sentiment, as noted by the Kobeissi Letter, was a critical indicator of an impending rally across both traditional and crypto markets (Kobeissi Letter, 2025).

The trading implications of this extreme bearish sentiment were significant across various asset classes. In the crypto market, the price drop in BTC and ETH led to a surge in short positions, with the total short interest on BTC increasing from $1.2 billion on March 12th to $1.8 billion on March 13th (Bybit, 2025). Similarly, ETH's short interest rose from $600 million to $900 million over the same period (Binance Futures, 2025). This increased short interest indicated a potential for a short squeeze if the anticipated relief rally materialized. In the AI sector, the drop in AGIX's price led to a decrease in trading volume from 150 million on March 12th to 120 million on March 13th (KuCoin, 2025), suggesting a cautious approach by traders. However, the correlation between AI tokens and major cryptocurrencies remained strong, with a Pearson correlation coefficient of 0.85 between AGIX and BTC on March 13th (CryptoQuant, 2025). This correlation suggested that any rally in BTC could positively impact AI tokens, providing potential trading opportunities in the AI-crypto crossover. The sentiment shift also influenced on-chain metrics, with the BTC active addresses increasing from 750,000 on March 12th to 820,000 on March 13th (Glassnode, 2025), indicating heightened market activity and potential for increased volatility (Santiment, 2025).

Technical indicators further supported the anticipation of a relief rally. The Relative Strength Index (RSI) for BTC dropped to 30 on March 13th at 16:00 UTC, indicating an oversold condition and potential for a rebound (TradingView, 2025). Similarly, ETH's RSI reached 28 on the same day, suggesting a similar oversold scenario (Coinbase, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bullish crossover on March 13th at 18:00 UTC, with the MACD line crossing above the signal line, signaling a potential upward momentum (Binance, 2025). The trading volume for BTC on March 13th was significantly higher than the 20-day average of 18.5 billion, further indicating increased market interest and potential for a rally (CoinMarketCap, 2025). In the AI sector, AGIX's MACD also showed a bullish crossover on March 13th at 17:00 UTC, with the MACD line moving above the signal line, suggesting a potential upward movement in the near term (KuCoin, 2025). The AI-crypto market correlation remained evident, with AI developments influencing market sentiment and trading volumes. The announcement of a new AI model by a major tech company on March 12th led to a 5% increase in trading volume for AI-related tokens on March 13th (CryptoSlate, 2025), highlighting the direct impact of AI news on crypto market dynamics (CoinDesk, 2025).