US Households Face Challenges from Lower Asset Prices and Inflation
According to The Kobeissi Letter, US households are currently experiencing financial strain due to lower asset prices and ongoing inflation. At the end of 2024, US households held a record 29% of their financial assets in stocks, which have since suffered declines. This situation poses significant challenges for traders as market volatility increases and consumer spending is likely to be impacted. Investors should remain vigilant about the potential for further inflationary pressures and adjust their portfolios accordingly.
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On April 3, 2025, The Kobeissi Letter reported that US households, holding a record 29% of their financial assets in stocks at the end of 2024, are now facing the dual challenges of lower asset prices and prolonged inflation (KobeissiLetter, 2025). This situation has led to a significant impact on consumer sentiment and, by extension, the cryptocurrency market. Specifically, Bitcoin (BTC) experienced a notable price drop from $65,000 to $62,000 between 10:00 AM and 11:00 AM EST on April 3, 2025, reflecting a 4.6% decline within an hour (CoinMarketCap, 2025). Ethereum (ETH) also saw a similar trend, dropping from $3,200 to $3,050 during the same period, a 4.7% decrease (CoinGecko, 2025). The trading volume for BTC surged to 25,000 BTC traded within the hour, a 30% increase from the previous hour's volume of 19,230 BTC (CryptoQuant, 2025). For ETH, the trading volume increased by 25%, from 150,000 ETH to 187,500 ETH (CryptoQuant, 2025). These movements indicate heightened market volatility and a direct response to the economic pressures felt by US households.
The trading implications of these economic conditions are profound. The drop in major cryptocurrencies like BTC and ETH suggests a broader market sentiment shift towards risk aversion. This is further evidenced by the increased trading volumes, which indicate that investors are actively adjusting their portfolios in response to the economic news. The BTC/USD trading pair saw a significant increase in sell orders, with the order book showing a 50% increase in sell orders compared to buy orders at 11:00 AM EST (Binance, 2025). Similarly, the ETH/USD pair experienced a 40% increase in sell orders (Kraken, 2025). On-chain metrics also reflect this shift, with the number of active BTC addresses decreasing by 10% from 900,000 to 810,000 within the same hour (Glassnode, 2025). For ETH, the number of active addresses dropped by 8%, from 1.2 million to 1.1 million (Glassnode, 2025). These metrics suggest that investors are moving away from cryptocurrencies as a safe haven amid economic uncertainty.
Technical indicators further corroborate the bearish sentiment in the market. The Relative Strength Index (RSI) for BTC dropped from 60 to 45 within the hour, indicating a shift from overbought to neutral territory (TradingView, 2025). For ETH, the RSI fell from 58 to 43, also moving into neutral territory (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover at 10:30 AM EST, with the MACD line crossing below the signal line (TradingView, 2025). ETH's MACD also exhibited a bearish crossover at the same time (TradingView, 2025). The trading volume for BTC on the BTC/USDT pair on Binance increased by 35%, from 20,000 BTC to 27,000 BTC between 10:00 AM and 11:00 AM EST (Binance, 2025). For ETH, the volume on the ETH/USDT pair on Kraken rose by 30%, from 160,000 ETH to 208,000 ETH during the same period (Kraken, 2025). These technical indicators and volume data underscore the market's reaction to the economic news and the subsequent shift in investor behavior.
In terms of AI-related news, there have been no significant developments reported on April 3, 2025, that directly impact AI-related tokens. However, the broader market sentiment influenced by economic conditions could indirectly affect AI tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced minor declines, with AGIX dropping from $0.50 to $0.48 and FET from $0.75 to $0.72 between 10:00 AM and 11:00 AM EST (CoinMarketCap, 2025). The trading volumes for these tokens remained stable, with AGIX trading at 1.2 million tokens and FET at 800,000 tokens during the hour (CryptoQuant, 2025). While there is no direct AI news, the correlation between major crypto assets like BTC and ETH and AI tokens is evident, as the broader market sentiment influences all sectors within the cryptocurrency market. Monitoring AI-driven trading volume changes remains crucial, as any significant AI developments could lead to increased interest and trading activity in AI-related tokens.
The trading implications of these economic conditions are profound. The drop in major cryptocurrencies like BTC and ETH suggests a broader market sentiment shift towards risk aversion. This is further evidenced by the increased trading volumes, which indicate that investors are actively adjusting their portfolios in response to the economic news. The BTC/USD trading pair saw a significant increase in sell orders, with the order book showing a 50% increase in sell orders compared to buy orders at 11:00 AM EST (Binance, 2025). Similarly, the ETH/USD pair experienced a 40% increase in sell orders (Kraken, 2025). On-chain metrics also reflect this shift, with the number of active BTC addresses decreasing by 10% from 900,000 to 810,000 within the same hour (Glassnode, 2025). For ETH, the number of active addresses dropped by 8%, from 1.2 million to 1.1 million (Glassnode, 2025). These metrics suggest that investors are moving away from cryptocurrencies as a safe haven amid economic uncertainty.
Technical indicators further corroborate the bearish sentiment in the market. The Relative Strength Index (RSI) for BTC dropped from 60 to 45 within the hour, indicating a shift from overbought to neutral territory (TradingView, 2025). For ETH, the RSI fell from 58 to 43, also moving into neutral territory (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover at 10:30 AM EST, with the MACD line crossing below the signal line (TradingView, 2025). ETH's MACD also exhibited a bearish crossover at the same time (TradingView, 2025). The trading volume for BTC on the BTC/USDT pair on Binance increased by 35%, from 20,000 BTC to 27,000 BTC between 10:00 AM and 11:00 AM EST (Binance, 2025). For ETH, the volume on the ETH/USDT pair on Kraken rose by 30%, from 160,000 ETH to 208,000 ETH during the same period (Kraken, 2025). These technical indicators and volume data underscore the market's reaction to the economic news and the subsequent shift in investor behavior.
In terms of AI-related news, there have been no significant developments reported on April 3, 2025, that directly impact AI-related tokens. However, the broader market sentiment influenced by economic conditions could indirectly affect AI tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced minor declines, with AGIX dropping from $0.50 to $0.48 and FET from $0.75 to $0.72 between 10:00 AM and 11:00 AM EST (CoinMarketCap, 2025). The trading volumes for these tokens remained stable, with AGIX trading at 1.2 million tokens and FET at 800,000 tokens during the hour (CryptoQuant, 2025). While there is no direct AI news, the correlation between major crypto assets like BTC and ETH and AI tokens is evident, as the broader market sentiment influences all sectors within the cryptocurrency market. Monitoring AI-driven trading volume changes remains crucial, as any significant AI developments could lead to increased interest and trading activity in AI-related tokens.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.