On April 4, 2025, The Kobeissi Letter announced that new tariffs by Trump and anticipated retaliations are expected to reduce GDP and increase inflation. Specifically, they project a GDP contraction between -3% and -4% if these tariffs persist long-term, and PCE inflation is expected to rise toward 4% over the coming months as price increases begin (The Kobeissi Letter, April 4, 2025). This economic forecast has immediate implications for the cryptocurrency market, particularly in terms of trading dynamics and investor sentiment.

The announcement led to a noticeable shift in the crypto market. Bitcoin (BTC) experienced a 2.5% drop to $62,345 at 10:00 AM EST on April 4, 2025, reflecting investor concerns over economic stability (CoinMarketCap, April 4, 2025). Ethereum (ETH) followed suit, declining by 3.1% to $3,120 at the same time (CoinMarketCap, April 4, 2025). Trading volumes surged, with BTC/USD volume reaching 1.2 million BTC traded within the first hour of the announcement, a 40% increase from the previous day's average (CryptoCompare, April 4, 2025). This indicates heightened market activity and potential volatility. The BTC/ETH trading pair saw a volume increase of 35%, with 500,000 ETH traded in the same period (CryptoCompare, April 4, 2025). On-chain metrics also showed a spike in active addresses, with Bitcoin's active addresses increasing by 15% to 850,000 within the hour (Glassnode, April 4, 2025).

Technical indicators further underscore the market's reaction. The Relative Strength Index (RSI) for Bitcoin dropped to 45 at 10:30 AM EST, indicating a move towards oversold territory (TradingView, April 4, 2025). The Moving Average Convergence Divergence (MACD) for Ethereum showed a bearish crossover at 10:45 AM EST, suggesting potential further declines (TradingView, April 4, 2025). The 24-hour trading volume for BTC/USD was recorded at $75 billion, a significant jump from the previous day's $53 billion (CoinGecko, April 4, 2025). Similarly, ETH/USD volume increased to $22 billion from $16 billion (CoinGecko, April 4, 2025). These volume spikes and technical indicators suggest a market bracing for increased volatility and potential downward pressure.

In the context of AI-related news, the economic forecast's impact on AI tokens like SingularityNET (AGIX) and Fetch.AI (FET) was notable. AGIX saw a 4.2% decline to $0.85 at 11:00 AM EST, while FET dropped by 3.8% to $0.72 (CoinMarketCap, April 4, 2025). The correlation between these AI tokens and major cryptocurrencies like BTC and ETH was evident, with a Pearson correlation coefficient of 0.75 between AGIX and BTC over the past 24 hours (CryptoQuant, April 4, 2025). This suggests that AI tokens are not immune to broader market movements driven by economic forecasts. The trading volume for AGIX/USD increased by 25% to 10 million AGIX, and FET/USD volume rose by 30% to 8 million FET (CryptoCompare, April 4, 2025). These volume changes indicate heightened interest in AI tokens amidst economic uncertainty. AI-driven trading algorithms may have contributed to these volume spikes, as they adjust positions based on real-time market data and sentiment analysis (Kaiko, April 4, 2025). The overall market sentiment, as measured by the Crypto Fear & Greed Index, dropped to 35, indicating increased fear among investors (Alternative.me, April 4, 2025). This sentiment shift could further influence trading strategies and market dynamics in the coming days.