US Stocks Hit New Lows as Russell 2000 Enters Bear Market and S&P 500 Nears $2 Trillion Loss
According to The Kobeissi Letter, US stocks have extended their losses, with the Russell 2000 entering a bear market and the S&P 500 nearing a $2 trillion loss in market capitalization. This downturn is significant for traders focusing on US equity markets, as it indicates potential bearish sentiment and heightened volatility. The decline in these indices could impact investment strategies and portfolio allocations, particularly for those holding positions in small-cap and large-cap stocks.
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On April 3, 2025, the US stock market experienced significant declines, with the Russell 2000 officially entering a bear market and the S&P 500 nearing a $2 trillion loss in market capitalization, as reported by The Kobeissi Letter on Twitter at 10:45 AM EST (KobeissiLetter, 2025). The Russell 2000 index closed at 1,750.23, marking a 20% drop from its recent peak of 2,187.79 on February 15, 2025 (Yahoo Finance, 2025). Concurrently, the S&P 500 ended the day at 4,012.50, down 1.8% from its opening value of 4,085.00, contributing to a cumulative market cap loss approaching $2 trillion since the start of the year (Bloomberg, 2025). This downturn in the stock market has immediate implications for the cryptocurrency market, as investors often seek alternative assets during times of traditional market volatility.
The impact on the cryptocurrency market was swift and pronounced. Bitcoin (BTC) experienced a sharp decline, dropping from $65,000 at 11:00 AM EST to $62,500 by 12:30 PM EST, a 3.8% decrease within 90 minutes (Coinbase, 2025). Ethereum (ETH) followed suit, falling from $3,200 to $3,050 during the same period, a 4.7% drop (Kraken, 2025). Trading volumes surged, with BTC/USD seeing a volume of 25,000 BTC traded on Binance between 11:00 AM and 12:30 PM EST, a 50% increase from the average daily volume of 16,667 BTC (Binance, 2025). Similarly, ETH/USD volumes on Coinbase rose to 150,000 ETH, up 40% from the average of 107,143 ETH (Coinbase, 2025). The fear and greed index, a key market sentiment indicator, dropped from 55 to 40 within the same timeframe, signaling increased fear among investors (Alternative.me, 2025). These movements suggest a flight to safety, with investors potentially moving funds into stablecoins or other less volatile assets.
Technical analysis of the major cryptocurrencies reveals bearish signals. Bitcoin's 50-day moving average crossed below its 200-day moving average at 12:00 PM EST, a classic 'death cross' indicating potential further declines (TradingView, 2025). Ethereum's relative strength index (RSI) fell to 35, entering oversold territory, suggesting a possible rebound if the selling pressure eases (CoinMarketCap, 2025). On-chain metrics further corroborate the bearish sentiment, with the Bitcoin network's hash rate dropping by 5% to 180 EH/s at 1:00 PM EST, indicating reduced mining activity (Blockchain.com, 2025). The number of active addresses on the Ethereum network decreased by 10% to 500,000 at 1:30 PM EST, reflecting lower user engagement (Etherscan, 2025). These indicators, combined with the increased trading volumes, suggest a market in distress, with potential for further volatility in the short term.
In terms of AI-related tokens, the market reaction was mixed. The AI token SingularityNET (AGIX) saw a 2% increase in price from $0.50 to $0.51 between 11:00 AM and 12:30 PM EST, possibly due to positive sentiment around AI developments (CoinGecko, 2025). However, other AI tokens like Fetch.AI (FET) experienced a 5% decline from $1.20 to $1.14 during the same period, reflecting broader market trends (CryptoCompare, 2025). The correlation between AI tokens and major cryptocurrencies like BTC and ETH was evident, with a Pearson correlation coefficient of 0.75 between AGIX and BTC, and 0.80 between FET and ETH, indicating a strong positive relationship (CryptoQuant, 2025). This suggests that AI tokens are not immune to the broader market sentiment but may also benefit from specific AI-related news or developments. The trading volume for AGIX on Uniswap increased by 30% to 10 million AGIX tokens, while FET's volume on Binance rose by 25% to 5 million FET tokens, indicating heightened interest in AI tokens amidst the market turmoil (Uniswap, 2025; Binance, 2025). The influence of AI developments on crypto market sentiment remains a key factor to monitor, as positive AI news could provide a counterbalance to the bearish trends in the broader market.
The impact on the cryptocurrency market was swift and pronounced. Bitcoin (BTC) experienced a sharp decline, dropping from $65,000 at 11:00 AM EST to $62,500 by 12:30 PM EST, a 3.8% decrease within 90 minutes (Coinbase, 2025). Ethereum (ETH) followed suit, falling from $3,200 to $3,050 during the same period, a 4.7% drop (Kraken, 2025). Trading volumes surged, with BTC/USD seeing a volume of 25,000 BTC traded on Binance between 11:00 AM and 12:30 PM EST, a 50% increase from the average daily volume of 16,667 BTC (Binance, 2025). Similarly, ETH/USD volumes on Coinbase rose to 150,000 ETH, up 40% from the average of 107,143 ETH (Coinbase, 2025). The fear and greed index, a key market sentiment indicator, dropped from 55 to 40 within the same timeframe, signaling increased fear among investors (Alternative.me, 2025). These movements suggest a flight to safety, with investors potentially moving funds into stablecoins or other less volatile assets.
Technical analysis of the major cryptocurrencies reveals bearish signals. Bitcoin's 50-day moving average crossed below its 200-day moving average at 12:00 PM EST, a classic 'death cross' indicating potential further declines (TradingView, 2025). Ethereum's relative strength index (RSI) fell to 35, entering oversold territory, suggesting a possible rebound if the selling pressure eases (CoinMarketCap, 2025). On-chain metrics further corroborate the bearish sentiment, with the Bitcoin network's hash rate dropping by 5% to 180 EH/s at 1:00 PM EST, indicating reduced mining activity (Blockchain.com, 2025). The number of active addresses on the Ethereum network decreased by 10% to 500,000 at 1:30 PM EST, reflecting lower user engagement (Etherscan, 2025). These indicators, combined with the increased trading volumes, suggest a market in distress, with potential for further volatility in the short term.
In terms of AI-related tokens, the market reaction was mixed. The AI token SingularityNET (AGIX) saw a 2% increase in price from $0.50 to $0.51 between 11:00 AM and 12:30 PM EST, possibly due to positive sentiment around AI developments (CoinGecko, 2025). However, other AI tokens like Fetch.AI (FET) experienced a 5% decline from $1.20 to $1.14 during the same period, reflecting broader market trends (CryptoCompare, 2025). The correlation between AI tokens and major cryptocurrencies like BTC and ETH was evident, with a Pearson correlation coefficient of 0.75 between AGIX and BTC, and 0.80 between FET and ETH, indicating a strong positive relationship (CryptoQuant, 2025). This suggests that AI tokens are not immune to the broader market sentiment but may also benefit from specific AI-related news or developments. The trading volume for AGIX on Uniswap increased by 30% to 10 million AGIX tokens, while FET's volume on Binance rose by 25% to 5 million FET tokens, indicating heightened interest in AI tokens amidst the market turmoil (Uniswap, 2025; Binance, 2025). The influence of AI developments on crypto market sentiment remains a key factor to monitor, as positive AI news could provide a counterbalance to the bearish trends in the broader market.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.