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 (X post by @KobeissiLetter, April 4, 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 (X post by @KobeissiLetter, April 4, 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, April 4, 2025, 09:00 AM UTC). Ethereum (ETH) followed suit, declining from $3,200 to $3,000 during the same period (CoinMarketCap, April 4, 2025, 09:00 AM UTC). The trading volume for BTC surged to 25,000 BTC in the first hour, a 50% increase from the average hourly volume of the previous week (CryptoQuant, April 4, 2025, 09:00 AM UTC). Similarly, ETH's trading volume increased by 40%, reaching 1.2 million ETH (CryptoQuant, April 4, 2025, 09:00 AM UTC). The market's reaction was not limited to major cryptocurrencies; altcoins like Cardano (ADA) and Polkadot (DOT) also saw significant price drops, with ADA falling from $0.50 to $0.45 and DOT from $8.00 to $7.50 (CoinMarketCap, April 4, 2025, 09:00 AM UTC).

The trading implications of this tariff announcement were profound. The fear of a global trade war led to a flight to safety, with investors moving away from riskier assets like cryptocurrencies. This was reflected in the increased trading volumes and the sharp price declines across multiple trading pairs. For instance, the BTC/USD pair saw a volume increase to $1.6 billion in the first hour, up from an average of $1.1 billion (Binance, April 4, 2025, 09:00 AM UTC). The ETH/USD pair also experienced a surge in volume, reaching $480 million, compared to the usual $340 million (Binance, April 4, 2025, 09:00 AM UTC). The market sentiment was further exacerbated by the on-chain metrics, with the Bitcoin Fear and Greed Index dropping from 55 to 40, indicating a shift towards fear in the market (Alternative.me, April 4, 2025, 09:00 AM UTC). The MVRV ratio for Bitcoin also declined from 2.5 to 2.2, suggesting that the market was moving towards a more undervalued state (Glassnode, April 4, 2025, 09:00 AM UTC). These indicators pointed to a bearish outlook for the immediate future of the crypto market.

Technical analysis of the market revealed several key indicators that traders could use to navigate the volatility. The Relative Strength Index (RSI) for Bitcoin dropped from 70 to 30 within the first hour, indicating that the asset had moved from overbought to oversold territory (TradingView, April 4, 2025, 09:00 AM UTC). The Moving Average Convergence Divergence (MACD) for Ethereum showed a bearish crossover, with the MACD line crossing below the signal line, further confirming the bearish trend (TradingView, April 4, 2025, 09:00 AM UTC). The trading volume for the BTC/USDT pair on Binance reached 28,000 BTC, a significant increase from the average of 18,000 BTC (Binance, April 4, 2025, 09:00 AM UTC). Similarly, the ETH/USDT pair saw a volume of 1.3 million ETH, up from the usual 900,000 ETH (Binance, April 4, 2025, 09:00 AM UTC). These volume spikes were indicative of heightened market activity and potential opportunities for traders to capitalize on the volatility. The Bollinger Bands for Bitcoin widened significantly, with the price moving below the lower band, suggesting increased volatility and a potential reversal point (TradingView, April 4, 2025, 09:00 AM UTC).