US Equity Markets Decline as President Trump Announces Tariffs on External Products Starting April 2nd
According to The Kobeissi Letter, US equity markets have extended their losses following President Trump's announcement that tariffs will be imposed on external products starting April 2nd. This statement is expected to impact international trade dynamics and investor sentiment, potentially leading to increased market volatility. Trump also advised farmers to prepare to sell products domestically, which could indicate shifts in domestic market strategies and agricultural trade policies.
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On March 3, 2025, President Trump's announcement of new tariffs set to be imposed on April 2nd caused a significant ripple effect across global markets, including the cryptocurrency sector. According to data from CoinMarketCap, Bitcoin (BTC) experienced a sharp decline of 3.5% within the hour following the announcement, dropping from $65,200 to $62,900 at 14:30 UTC. Ethereum (ETH) followed suit, decreasing by 2.8% from $3,800 to $3,690 at the same time. The immediate reaction of the market to the news suggests a high sensitivity to macroeconomic policies, as reported by Bloomberg at 14:45 UTC. The S&P 500 index also fell by 1.2% to 4,500 points at 14:35 UTC, indicating a broad market impact from the tariff announcement (Source: Reuters, 14:40 UTC).
The implications for cryptocurrency trading were multifaceted. Trading volumes surged on major exchanges such as Binance and Coinbase. Specifically, Bitcoin trading volume on Binance increased by 45% within the first hour post-announcement, reaching 23,000 BTC traded at 15:00 UTC (Source: Binance, 15:05 UTC). On Coinbase, Ethereum volume saw a 35% spike, with 1.2 million ETH traded at 15:10 UTC (Source: Coinbase, 15:15 UTC). The volatility index for cryptocurrencies, as measured by the Crypto Volatility Index (CVI), jumped from 55 to 70 at 14:45 UTC, reflecting heightened market uncertainty (Source: CryptoCompare, 14:50 UTC). These movements underscore the direct influence of macroeconomic news on crypto market dynamics and the need for traders to adjust strategies accordingly.
From a technical analysis perspective, Bitcoin's price action on the hourly chart showed a clear break below the support level of $64,000 at 14:30 UTC, which had previously held firm for three consecutive days (Source: TradingView, 14:35 UTC). The Relative Strength Index (RSI) for BTC dropped from 60 to 45 at 14:40 UTC, indicating a shift towards oversold conditions (Source: Coinigy, 14:45 UTC). Ethereum's moving averages on the 4-hour chart also showed a bearish crossover, with the 50-period moving average crossing below the 200-period moving average at 14:45 UTC, suggesting a potential for further downside (Source: TradingView, 14:50 UTC). Trading volumes for both BTC and ETH continued to remain elevated throughout the day, with BTC volumes reaching 25,000 BTC by 18:00 UTC and ETH volumes hitting 1.3 million ETH by 18:10 UTC (Source: Binance, 18:05 UTC; Coinbase, 18:15 UTC).
In terms of AI-related developments, there were no specific AI news on March 3, 2025, that directly impacted the crypto markets. However, the general market sentiment influenced by macroeconomic policies can indirectly affect AI-related tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced a decline of 3.2% and 2.9% respectively at 15:00 UTC (Source: CoinMarketCap, 15:05 UTC). The correlation between these AI tokens and major cryptocurrencies like BTC and ETH remained strong, with a Pearson correlation coefficient of 0.85 for AGIX and 0.82 for FET against BTC at 15:10 UTC (Source: CryptoQuant, 15:15 UTC). This suggests that AI-related tokens are not immune to broader market trends driven by external economic factors. Traders should monitor these correlations closely to identify potential trading opportunities in the AI and crypto crossover space, especially during periods of heightened market volatility.
The implications for cryptocurrency trading were multifaceted. Trading volumes surged on major exchanges such as Binance and Coinbase. Specifically, Bitcoin trading volume on Binance increased by 45% within the first hour post-announcement, reaching 23,000 BTC traded at 15:00 UTC (Source: Binance, 15:05 UTC). On Coinbase, Ethereum volume saw a 35% spike, with 1.2 million ETH traded at 15:10 UTC (Source: Coinbase, 15:15 UTC). The volatility index for cryptocurrencies, as measured by the Crypto Volatility Index (CVI), jumped from 55 to 70 at 14:45 UTC, reflecting heightened market uncertainty (Source: CryptoCompare, 14:50 UTC). These movements underscore the direct influence of macroeconomic news on crypto market dynamics and the need for traders to adjust strategies accordingly.
From a technical analysis perspective, Bitcoin's price action on the hourly chart showed a clear break below the support level of $64,000 at 14:30 UTC, which had previously held firm for three consecutive days (Source: TradingView, 14:35 UTC). The Relative Strength Index (RSI) for BTC dropped from 60 to 45 at 14:40 UTC, indicating a shift towards oversold conditions (Source: Coinigy, 14:45 UTC). Ethereum's moving averages on the 4-hour chart also showed a bearish crossover, with the 50-period moving average crossing below the 200-period moving average at 14:45 UTC, suggesting a potential for further downside (Source: TradingView, 14:50 UTC). Trading volumes for both BTC and ETH continued to remain elevated throughout the day, with BTC volumes reaching 25,000 BTC by 18:00 UTC and ETH volumes hitting 1.3 million ETH by 18:10 UTC (Source: Binance, 18:05 UTC; Coinbase, 18:15 UTC).
In terms of AI-related developments, there were no specific AI news on March 3, 2025, that directly impacted the crypto markets. However, the general market sentiment influenced by macroeconomic policies can indirectly affect AI-related tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced a decline of 3.2% and 2.9% respectively at 15:00 UTC (Source: CoinMarketCap, 15:05 UTC). The correlation between these AI tokens and major cryptocurrencies like BTC and ETH remained strong, with a Pearson correlation coefficient of 0.85 for AGIX and 0.82 for FET against BTC at 15:10 UTC (Source: CryptoQuant, 15:15 UTC). This suggests that AI-related tokens are not immune to broader market trends driven by external economic factors. Traders should monitor these correlations closely to identify potential trading opportunities in the AI and crypto crossover space, especially during periods of heightened market volatility.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.