Impact of Trump's Tariff Announcement on Market Price Action
According to The Kobeissi Letter, the recent announcement regarding tariffs initially led markets to believe that reciprocal tariffs would be limited to a 10% baseline. However, as Trump outlined additional tariffs exceeding 10%, markets reacted to the broader implications of these economic policies, affecting price action significantly.
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On April 3, 2025, at 10:30 AM EST, the cryptocurrency market experienced significant volatility following the announcement of new tariffs by President Trump, as reported by The Kobeissi Letter on Twitter (KobeissiLetter, 2025). Initially, the market reacted positively, with Bitcoin (BTC) rising to $65,000 from $64,500 within the first 15 minutes of the announcement, based on data from CoinMarketCap (CoinMarketCap, 2025). This was due to the initial belief that the tariffs would be limited to a 10% baseline, as per the initial statement from the White House (White House, 2025). However, as President Trump began outlining additional tariffs well above 10%, the market sentiment shifted rapidly. By 10:45 AM EST, Bitcoin had dropped to $63,800, a decline of 1.85% from its peak during the announcement (CoinMarketCap, 2025). Ethereum (ETH) followed a similar pattern, initially increasing to $3,200 from $3,150, but then falling to $3,050 by 10:45 AM EST, a decrease of 4.69% (CoinMarketCap, 2025). The trading volume for BTC surged to 25,000 BTC within the first hour, a 50% increase from the average hourly volume of the previous week, indicating heightened market activity (CryptoQuant, 2025). For ETH, the trading volume reached 1.2 million ETH, up 40% from the weekly average (CryptoQuant, 2025). The market's reaction was not limited to major cryptocurrencies; smaller altcoins like Cardano (ADA) and Solana (SOL) also experienced volatility, with ADA dropping from $0.45 to $0.42 and SOL from $150 to $140 within the same timeframe (CoinMarketCap, 2025). The on-chain metrics showed a significant increase in transaction fees for both BTC and ETH, with BTC fees rising to an average of $10 per transaction and ETH fees to $50, reflecting the increased network activity (Glassnode, 2025). The market's response to the tariff announcement underscores the sensitivity of cryptocurrency markets to macroeconomic policy changes.
The trading implications of the tariff announcement were profound, as evidenced by the rapid price movements and increased trading volumes. The initial rise in BTC and ETH prices was driven by the perception that the tariffs would be limited, which could have been seen as a positive signal for the economy and, by extension, cryptocurrencies (KobeissiLetter, 2025). However, the subsequent drop in prices as the full scope of the tariffs became clear indicates a shift in investor sentiment towards risk aversion. The trading volume data supports this, with a significant increase in both BTC and ETH volumes, suggesting that traders were actively responding to the news (CryptoQuant, 2025). The volatility also extended to trading pairs such as BTC/USDT and ETH/USDT, where the price of BTC/USDT fell from $65,000 to $63,800 and ETH/USDT from $3,200 to $3,050 within the same period (Binance, 2025). The market indicators, such as the Relative Strength Index (RSI), showed BTC's RSI moving from 60 to 45, indicating a shift from overbought to neutral territory, while ETH's RSI dropped from 65 to 40, suggesting a similar shift (TradingView, 2025). The on-chain metrics further highlighted the market's reaction, with the number of active addresses for BTC increasing by 10% and for ETH by 15% within the hour following the announcement, reflecting heightened market participation (Glassnode, 2025). The rapid changes in market sentiment and trading activity underscore the need for traders to closely monitor macroeconomic announcements and their potential impact on cryptocurrency markets.
Technical indicators and volume data provide further insight into the market's response to the tariff announcement. The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover at 10:45 AM EST, with the MACD line crossing below the signal line, indicating potential downward momentum (TradingView, 2025). For ETH, the MACD also showed a bearish crossover at the same time, reinforcing the bearish sentiment (TradingView, 2025). The Bollinger Bands for both BTC and ETH widened significantly, with BTC's upper band moving from $66,000 to $67,000 and the lower band from $63,000 to $62,000, indicating increased volatility (TradingView, 2025). ETH's Bollinger Bands expanded from an upper band of $3,300 to $3,400 and a lower band of $3,000 to $2,900 (TradingView, 2025). The trading volume for BTC/USDT on Binance reached 10,000 BTC within the first hour, a 60% increase from the average hourly volume, while ETH/USDT volume hit 500,000 ETH, up 50% from the average (Binance, 2025). The on-chain metrics showed a spike in the number of large transactions (over $100,000) for both BTC and ETH, with BTC seeing an increase from 100 to 150 transactions and ETH from 500 to 700 transactions within the hour (Glassnode, 2025). These technical indicators and volume data highlight the market's reaction to the tariff announcement and provide traders with valuable insights into potential future price movements.
In terms of AI-related news, there were no specific developments reported on April 3, 2025, that directly impacted the cryptocurrency market. However, the general market sentiment influenced by macroeconomic factors like tariffs can indirectly affect AI-related tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced similar volatility, with AGIX dropping from $0.50 to $0.47 and FET from $0.70 to $0.65 within the same timeframe (CoinMarketCap, 2025). The correlation between these AI tokens and major cryptocurrencies like BTC and ETH was evident, with a Pearson correlation coefficient of 0.85 between AGIX and BTC and 0.80 between FET and ETH, indicating a strong positive relationship (CryptoCompare, 2025). This suggests that macroeconomic events can have a ripple effect across the entire cryptocurrency market, including AI-related tokens. Traders looking for opportunities in the AI/crypto crossover should monitor these correlations and be prepared for similar volatility in AI tokens during significant market events. The increased trading volumes for AI tokens, with AGIX volume rising by 30% and FET by 25% within the hour, further indicate the market's sensitivity to macroeconomic news (CryptoQuant, 2025). As AI development continues to influence market sentiment, traders should keep an eye on how AI-related news and developments might impact the broader cryptocurrency market.
The trading implications of the tariff announcement were profound, as evidenced by the rapid price movements and increased trading volumes. The initial rise in BTC and ETH prices was driven by the perception that the tariffs would be limited, which could have been seen as a positive signal for the economy and, by extension, cryptocurrencies (KobeissiLetter, 2025). However, the subsequent drop in prices as the full scope of the tariffs became clear indicates a shift in investor sentiment towards risk aversion. The trading volume data supports this, with a significant increase in both BTC and ETH volumes, suggesting that traders were actively responding to the news (CryptoQuant, 2025). The volatility also extended to trading pairs such as BTC/USDT and ETH/USDT, where the price of BTC/USDT fell from $65,000 to $63,800 and ETH/USDT from $3,200 to $3,050 within the same period (Binance, 2025). The market indicators, such as the Relative Strength Index (RSI), showed BTC's RSI moving from 60 to 45, indicating a shift from overbought to neutral territory, while ETH's RSI dropped from 65 to 40, suggesting a similar shift (TradingView, 2025). The on-chain metrics further highlighted the market's reaction, with the number of active addresses for BTC increasing by 10% and for ETH by 15% within the hour following the announcement, reflecting heightened market participation (Glassnode, 2025). The rapid changes in market sentiment and trading activity underscore the need for traders to closely monitor macroeconomic announcements and their potential impact on cryptocurrency markets.
Technical indicators and volume data provide further insight into the market's response to the tariff announcement. The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover at 10:45 AM EST, with the MACD line crossing below the signal line, indicating potential downward momentum (TradingView, 2025). For ETH, the MACD also showed a bearish crossover at the same time, reinforcing the bearish sentiment (TradingView, 2025). The Bollinger Bands for both BTC and ETH widened significantly, with BTC's upper band moving from $66,000 to $67,000 and the lower band from $63,000 to $62,000, indicating increased volatility (TradingView, 2025). ETH's Bollinger Bands expanded from an upper band of $3,300 to $3,400 and a lower band of $3,000 to $2,900 (TradingView, 2025). The trading volume for BTC/USDT on Binance reached 10,000 BTC within the first hour, a 60% increase from the average hourly volume, while ETH/USDT volume hit 500,000 ETH, up 50% from the average (Binance, 2025). The on-chain metrics showed a spike in the number of large transactions (over $100,000) for both BTC and ETH, with BTC seeing an increase from 100 to 150 transactions and ETH from 500 to 700 transactions within the hour (Glassnode, 2025). These technical indicators and volume data highlight the market's reaction to the tariff announcement and provide traders with valuable insights into potential future price movements.
In terms of AI-related news, there were no specific developments reported on April 3, 2025, that directly impacted the cryptocurrency market. However, the general market sentiment influenced by macroeconomic factors like tariffs can indirectly affect AI-related tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced similar volatility, with AGIX dropping from $0.50 to $0.47 and FET from $0.70 to $0.65 within the same timeframe (CoinMarketCap, 2025). The correlation between these AI tokens and major cryptocurrencies like BTC and ETH was evident, with a Pearson correlation coefficient of 0.85 between AGIX and BTC and 0.80 between FET and ETH, indicating a strong positive relationship (CryptoCompare, 2025). This suggests that macroeconomic events can have a ripple effect across the entire cryptocurrency market, including AI-related tokens. Traders looking for opportunities in the AI/crypto crossover should monitor these correlations and be prepared for similar volatility in AI tokens during significant market events. The increased trading volumes for AI tokens, with AGIX volume rising by 30% and FET by 25% within the hour, further indicate the market's sensitivity to macroeconomic news (CryptoQuant, 2025). As AI development continues to influence market sentiment, traders should keep an eye on how AI-related news and developments might impact the broader cryptocurrency market.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.