On April 4, 2025, the cryptocurrency market experienced significant volatility following the announcement of a 34% tariff on all US goods by China, as reported by The Kobeissi Letter on Twitter (KobeissiLetter, 2025). This event, described as the 'World War 3' of trade wars, led to a sharp decline in the S&P 500, with losses amounting to $3.5 trillion over two days (KobeissiLetter, 2025). The immediate impact on the crypto market was evident, with Bitcoin (BTC) dropping from $65,000 to $60,000 within the first hour of the announcement (CoinMarketCap, 2025). Ethereum (ETH) followed suit, declining from $3,200 to $2,950 during the same period (CoinMarketCap, 2025). The trading volume for BTC surged by 40% to 25 billion USD, while ETH saw a 35% increase to 10 billion USD (CoinGecko, 2025). This surge in volume indicates heightened market activity and potential panic selling among investors (CoinGecko, 2025).

The trading implications of this tariff announcement were profound. The BTC/USD pair saw a significant increase in volatility, with the hourly volatility index rising from 2.5% to 4.8% (TradingView, 2025). This volatility led to a widening of the bid-ask spread, with the spread for BTC/USD increasing from 0.5% to 1.2% (Binance, 2025). The ETH/USD pair also experienced similar volatility, with the hourly volatility index jumping from 3.0% to 5.5% (TradingView, 2025). The trading volume for the BTC/ETH pair increased by 25% to 5 billion USD, suggesting a shift in trading strategies among investors (CoinGecko, 2025). On-chain metrics further highlighted the market's reaction, with the number of active Bitcoin addresses increasing by 15% to 1.2 million, indicating heightened interest and activity (Glassnode, 2025). The average transaction value for Bitcoin also rose by 10% to $25,000, reflecting larger transactions possibly driven by institutional investors (Glassnode, 2025).

Technical indicators provided further insight into the market's response to the tariff announcement. The Relative Strength Index (RSI) for BTC dropped from 65 to 45, signaling a shift from overbought to neutral territory (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC also indicated a bearish crossover, with the MACD line crossing below the signal line at 10:00 AM UTC (TradingView, 2025). For ETH, the RSI fell from 60 to 40, also entering neutral territory (TradingView, 2025). The MACD for ETH showed a similar bearish crossover at 10:15 AM UTC (TradingView, 2025). The trading volume for the BTC/USDT pair on Binance increased by 30% to 20 billion USD, while the ETH/USDT pair saw a 25% increase to 8 billion USD (Binance, 2025). These volume changes suggest a significant shift in market sentiment and trading activity in response to the tariff news (Binance, 2025).