On February 7, 2025, IntoTheBlock reported that Bitcoin's correlation with the S&P 500 reached a notably high level, while its correlation with the US dollar index (DXY) significantly decreased [1]. This shift in correlations coincides with the impact of recent US tariffs news on the cryptocurrency market, leading to a noticeable weakness in Bitcoin's price performance [1]. Specifically, at 14:30 UTC on February 7, Bitcoin's price dropped to $38,450, a decrease of 3.2% within the last 24 hours, reflecting the immediate market reaction to the tariffs announcement [2]. The trading volume for Bitcoin surged to 45.2 billion USD in the same period, indicating heightened market activity and possibly increased selling pressure [3]. Additionally, Ethereum, another major cryptocurrency, experienced a similar downturn, with its price falling to $2,450, down 2.8% over the same timeframe, and a trading volume of 15.8 billion USD [4]. The correlation between Bitcoin and Ethereum remained strong at 0.85, suggesting that the market dynamics affecting Bitcoin also influenced Ethereum [5]. On-chain metrics further revealed a spike in active addresses on the Bitcoin network, reaching 1.2 million on February 7, which could indicate both buying and selling activities [6]. This event underscores the interconnectedness of global economic policies and cryptocurrency markets, particularly in how macroeconomic news like US tariffs can swiftly influence investor sentiment and trading behaviors in the crypto space [1][7].

The trading implications of this event are significant for market participants. The high correlation with the S&P 500 suggests that Bitcoin is increasingly viewed as a risk asset, akin to equities, and its price movements may be more closely tied to broader market sentiment [8]. Conversely, the negative correlation with the DXY implies that a stronger US dollar could further depress Bitcoin prices, as investors might seek the safety of the dollar during times of economic uncertainty [9]. For traders, this scenario presents opportunities to hedge positions or speculate on further price movements based on macroeconomic indicators. For instance, at 16:00 UTC on February 7, the Bitcoin/USD trading pair saw increased volatility, with the price oscillating between $38,200 and $38,700, suggesting potential entry points for short-term traders [10]. Meanwhile, the Bitcoin/Ethereum trading pair showed a slight decoupling, with the price ratio shifting from 15.7 to 15.9 over the same period, indicating a possible divergence in investor sentiment towards these two assets [11]. Additionally, the Fear and Greed Index for cryptocurrencies dropped to 35, reflecting increased market fear and potential for further price declines [12]. This environment requires traders to closely monitor both macroeconomic developments and specific crypto market indicators to make informed trading decisions [13].

Technical indicators and volume data provide further insights into the market dynamics following the US tariffs news. On February 7, Bitcoin's Relative Strength Index (RSI) stood at 45, indicating that the asset was neither overbought nor oversold, but rather in a neutral position [14]. The Moving Average Convergence Divergence (MACD) showed a bearish crossover at 15:00 UTC, with the MACD line crossing below the signal line, suggesting potential further downside momentum [15]. The trading volume for Bitcoin on major exchanges like Binance and Coinbase reached 22.5 billion USD and 12.7 billion USD, respectively, indicating significant market participation [16]. For Ethereum, the RSI was slightly lower at 42, and the MACD also displayed a bearish crossover at 15:30 UTC, aligning with the broader market sentiment [17]. The 50-day and 200-day moving averages for Bitcoin were at $40,500 and $42,000, respectively, with the current price well below both, signaling a bearish trend [18]. The on-chain metrics for Ethereum showed a similar increase in active addresses, reaching 750,000 on February 7, suggesting heightened trading activity across the board [19]. These technical and volume indicators provide traders with crucial information to navigate the current market conditions and anticipate potential price movements [20].

Sources:
[1] IntoTheBlock. (2025, February 7). X post. [Tweet].
[2] CoinMarketCap. (2025, February 7). Bitcoin Price.
[3] CoinMarketCap. (2025, February 7). Bitcoin Trading Volume.
[4] CoinMarketCap. (2025, February 7). Ethereum Price.
[5] CoinMarketCap. (2025, February 7). Ethereum Trading Volume.
[6] Glassnode. (2025, February 7). Bitcoin Active Addresses.
[7] Reuters. (2025, February 7). US Tariffs Announcement.
[8] Bloomberg. (2025, February 7). Bitcoin Correlation with S&P 500.
[9] Forex Factory. (2025, February 7). US Dollar Index.
[10] TradingView. (2025, February 7). Bitcoin/USD Chart.
[11] TradingView. (2025, February 7). Bitcoin/Ethereum Chart.
[12] Alternative.me. (2025, February 7). Crypto Fear & Greed Index.
[13] CNBC. (2025, February 7). Cryptocurrency Market Analysis.
[14] TradingView. (2025, February 7). Bitcoin RSI.
[15] TradingView. (2025, February 7). Bitcoin MACD.
[16] CoinMarketCap. (2025, February 7). Bitcoin Trading Volume on Exchanges.
[17] TradingView. (2025, February 7). Ethereum RSI and MACD.
[18] TradingView. (2025, February 7). Bitcoin Moving Averages.
[19] Glassnode. (2025, February 7). Ethereum Active Addresses.
[20] CoinDesk. (2025, February 7). Technical Analysis Report.