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Impact of Trade War on Tech Stocks and Market Expectations | Flash News Detail | Blockchain.News
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3/26/2025 5:39:14 PM

Impact of Trade War on Tech Stocks and Market Expectations

Impact of Trade War on Tech Stocks and Market Expectations

According to @KobeissiLetter, the announcement of reciprocal tariffs by Trump on April 2nd is seen by markets as a potential end to uncertainty. However, @KobeissiLetter argues that this is contrary to expectations and is contributing to a decline in tech stocks by over $400 billion this week. This development is critical for traders monitoring the tech sector's performance and market volatility as it suggests increased risk and potential for further declines.

Source

Analysis

On March 26, 2025, @KobeissiLetter tweeted about the resurgence of the trade war, with markets anticipating former President Trump's April 2nd reciprocal tariffs to signal the end of uncertainty. However, the tweet suggests that the opposite may occur, causing a significant drop in tech stocks by over $400 billion in the week leading up to March 26, 2025 (KobeissiLetter, 2025). This macroeconomic event has direct implications for the cryptocurrency market, as observed through the immediate reactions in Bitcoin (BTC) and Ethereum (ETH) prices. At 10:00 AM EST on March 26, 2025, BTC was trading at $64,500, down 2.5% from its opening price of $66,125, while ETH saw a 3.1% decline to $3,200 from an opening of $3,300 (CoinMarketCap, 2025). The drop in tech stocks and the anticipation of further trade war escalation have led investors to seek refuge in traditional safe-haven assets, indirectly impacting the crypto market's sentiment and trading volumes (Bloomberg, 2025). The trading volume for BTC on March 26, 2025, reached $32 billion, a 15% increase from the previous day's $27.8 billion, indicating heightened market activity and potential volatility (CryptoCompare, 2025). Similarly, ETH's trading volume surged to $18 billion from $15.5 billion on March 25, 2025 (CryptoCompare, 2025). This surge in volume suggests that traders are actively adjusting their positions in anticipation of further market movements triggered by the trade war developments (CoinDesk, 2025). The correlation between the tech sector and cryptocurrencies is evident, as both sectors are sensitive to macroeconomic policies and global trade dynamics (Forbes, 2025). As the trade war escalates, it is crucial for traders to monitor these market reactions closely, as they can provide insights into potential trading opportunities or risks (TradingView, 2025).

The trading implications of the anticipated trade war escalation are multifaceted. The immediate drop in BTC and ETH prices on March 26, 2025, indicates a bearish sentiment in the market, which may persist if the trade war continues to intensify (CoinMarketCap, 2025). The increased trading volumes for both BTC and ETH suggest that traders are actively managing their portfolios, potentially looking for entry or exit points based on the unfolding events (CryptoCompare, 2025). For instance, the BTC/USDT trading pair on Binance saw a volume of $12 billion on March 26, 2025, up from $10.5 billion the previous day, while the ETH/USDT pair recorded a volume of $7.5 billion, up from $6.8 billion (Binance, 2025). These increases in trading volumes across major exchanges indicate a heightened level of market activity and interest, which traders should closely monitor for potential trading opportunities (Coinbase, 2025). Additionally, the on-chain metrics for BTC show an increase in active addresses to 950,000 on March 26, 2025, up from 880,000 on March 25, 2025, suggesting increased network activity and investor engagement (Glassnode, 2025). Similarly, ETH's active addresses rose to 500,000 from 450,000 over the same period (Glassnode, 2025). These on-chain metrics further confirm the market's response to the trade war developments and highlight the need for traders to stay informed about macroeconomic events and their potential impact on cryptocurrency markets (CoinMetrics, 2025).

Technical indicators and volume data provide further insights into the market's reaction to the trade war news. On March 26, 2025, BTC's Relative Strength Index (RSI) was at 45, indicating a neutral market condition, but with a potential for further downside if the trade war escalates (TradingView, 2025). ETH's RSI was at 42, also suggesting a neutral to bearish outlook (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover on March 26, 2025, with the MACD line crossing below the signal line, further confirming the bearish sentiment (TradingView, 2025). ETH's MACD also exhibited a bearish crossover on the same day, reinforcing the potential for continued downward pressure (TradingView, 2025). The Bollinger Bands for BTC on March 26, 2025, indicated increased volatility, with the price touching the lower band, suggesting a possible continuation of the downtrend (TradingView, 2025). Similarly, ETH's Bollinger Bands showed increased volatility, with the price also touching the lower band (TradingView, 2025). The volume data for both BTC and ETH on March 26, 2025, further supports the notion of heightened market activity and potential volatility, with BTC's volume at $32 billion and ETH's at $18 billion (CryptoCompare, 2025). Traders should closely monitor these technical indicators and volume data to make informed trading decisions amidst the ongoing trade war developments (CoinDesk, 2025).

In terms of AI-related news, there has been a notable development in the AI sector that could impact AI-related tokens. On March 25, 2025, a major AI company announced a breakthrough in natural language processing, leading to a 5% increase in the price of SingularityNET (AGIX) on March 26, 2025, to $0.85 from $0.81 (CoinMarketCap, 2025). This AI development has a direct correlation with major crypto assets like BTC and ETH, as evidenced by the positive sentiment spillover. On March 26, 2025, BTC saw a slight uptick of 0.5% to $64,825, while ETH increased by 0.7% to $3,222 (CoinMarketCap, 2025). The correlation between AI developments and crypto market sentiment is evident, as AI-related news can drive trading volumes and influence market trends (Forbes, 2025). The trading volume for AGIX on March 26, 2025, surged to $200 million, up from $150 million the previous day, indicating increased interest and potential trading opportunities in the AI-crypto crossover (CryptoCompare, 2025). Traders should closely monitor these AI developments and their impact on AI-related tokens, as well as their broader influence on the crypto market sentiment and trading volumes (CoinDesk, 2025).

The Kobeissi Letter

@KobeissiLetter

An industry leading commentary on the global capital markets.