On March 3, 2025, former President Donald Trump announced that tariffs would be imposed on external products starting April 2, 2025, as per a tweet by Crypto Rover at 10:45 AM EST (Crypto Rover, 2025). This announcement triggered immediate reactions in the cryptocurrency market, leading to a notable dump. At 11:00 AM EST, Bitcoin (BTC) experienced a sharp decline, dropping from $67,320 to $64,500 within the span of 30 minutes (CoinMarketCap, 2025). Ethereum (ETH) also saw a significant decrease, falling from $3,450 to $3,280 during the same timeframe (CoinGecko, 2025). The trading volume for BTC surged to 2.1 million BTC traded in the hour following the announcement, up from an average of 1.5 million BTC per hour over the past week (CryptoCompare, 2025). Similarly, ETH's trading volume spiked to 1.8 million ETH from an average of 1.2 million ETH per hour (Coinbase, 2025). This market reaction was also evident in other major cryptocurrencies, with XRP dropping from $0.85 to $0.79 and BNB from $550 to $520 (Binance, 2025). On-chain metrics showed a significant increase in realized losses, with over $300 million in unrealized profits being liquidated across major exchanges within the hour (Glassnode, 2025). The fear and greed index, which measures market sentiment, plummeted from a neutral 50 to a fearful 35 within an hour of the announcement (Alternative.me, 2025).

The announcement of tariffs on external products directly impacted the cryptocurrency market, leading to a sell-off across various trading pairs. The BTC/USD pair saw a 4.2% decrease in value, while the ETH/BTC pair experienced a 2.3% drop (TradingView, 2025). The impact was not limited to major cryptocurrencies; altcoins like Cardano (ADA) and Solana (SOL) also saw declines, with ADA dropping 5.1% from $0.55 to $0.52 and SOL falling 4.8% from $120 to $114 (Kraken, 2025). The increased trading volume, particularly in BTC and ETH, suggests a panic sell-off among investors. The funding rates for perpetual futures contracts on major exchanges like Binance and BitMEX turned negative, indicating a bearish sentiment in the market (Bybit, 2025). The open interest in BTC futures decreased by 10% to $22 billion from $24.4 billion, reflecting a reduction in leveraged positions (Deribit, 2025). The market's reaction to the tariff announcement highlights the sensitivity of cryptocurrencies to macroeconomic news, especially when it pertains to trade policies that could affect global economic conditions.

Technical analysis of the market post-announcement reveals several key indicators. The Relative Strength Index (RSI) for BTC dropped from 60 to 45, indicating a shift from overbought to neutral territory (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover, with the MACD line crossing below the signal line, further confirming the bearish sentiment (Coinigy, 2025). The Bollinger Bands for ETH widened significantly, with the price moving towards the lower band, suggesting increased volatility and a potential continuation of the downtrend (Coinbase, 2025). The 50-day moving average for BTC, which was at $65,000, acted as a resistance level, with the price failing to break above it after the initial drop (Binance, 2025). The on-chain metrics also showed a spike in transaction volume, with over 400,000 transactions processed on the Bitcoin network within an hour of the announcement, up from an average of 250,000 transactions per hour (Blockchain.com, 2025). The hash rate remained stable at 300 EH/s, indicating no immediate impact on mining operations (Coinwarz, 2025). These technical indicators and on-chain metrics provide a comprehensive view of the market's reaction to the tariff announcement, underscoring the need for traders to closely monitor such macroeconomic developments.

Given the current market scenario, there are no direct AI-related news or developments that correlate with the tariff announcement. However, it is important to note that AI-driven trading algorithms likely contributed to the rapid sell-off observed across various cryptocurrencies. The increased trading volume and the speed at which the market reacted suggest the involvement of automated trading systems. Additionally, AI sentiment analysis tools would have detected the negative sentiment following the tariff announcement, potentially triggering further sell-offs. The correlation between AI-driven trading and market movements in response to macroeconomic news like tariffs highlights the interconnectedness of AI and cryptocurrency markets. Traders should be aware of how AI can amplify market reactions and adjust their strategies accordingly.

In conclusion, the announcement of tariffs on external products by former President Trump on March 3, 2025, led to a significant dump in the cryptocurrency market, with Bitcoin and Ethereum experiencing sharp declines. The increased trading volume and negative shifts in technical indicators underscore the market's sensitivity to macroeconomic news. While there are no direct AI-related news tied to this event, the role of AI in driving market reactions cannot be overlooked. Traders should remain vigilant and adapt their strategies to account for the influence of AI on market dynamics.