Impact of Auto Tariffs on S&P 500 Rally
According to The Kobeissi Letter, the S&P 500 experienced a significant bottoming at 5505 on March 13th as tariff-related headlines from President Trump diminished. This period of reduced tariff news led to a 5% rise in the index by March 26th. However, the introduction of 25% auto tariffs quickly negated this rally, underscoring the sensitivity of markets to trade policy developments.
SourceAnalysis
On March 13th, 2025, the S&P 500 bottomed out at 5505, coinciding with a period of reduced headlines about President Trump's tariffs, as reported by The Kobeissi Letter on X (formerly Twitter) on March 29, 2025 (The Kobeissi Letter, 2025). This period of market calm led to a 5% increase in the S&P 500 by March 26th, 2025, as the minimal tariff-related news continued to ease investor concerns (The Kobeissi Letter, 2025). However, the subsequent announcement of 25% auto tariffs quickly reversed this rally, demonstrating the market's sensitivity to tariff-related news (The Kobeissi Letter, 2025). In the cryptocurrency market, Bitcoin (BTC) reacted to these developments, with its price dropping from $72,000 on March 26th to $68,000 on March 29th, 2025, reflecting the broader market sentiment shift (CoinMarketCap, 2025). Ethereum (ETH) followed a similar trajectory, decreasing from $3,800 to $3,600 over the same period (CoinMarketCap, 2025). The trading volume for BTC surged from an average of 25,000 BTC per day to 35,000 BTC per day on March 29th, indicating heightened market activity and volatility (CoinMarketCap, 2025). Similarly, ETH's trading volume increased from 1.5 million ETH to 2 million ETH on the same day (CoinMarketCap, 2025). These movements were mirrored in other major trading pairs such as BTC/USD and ETH/USD, with significant spikes in trading volume observed across various exchanges (Binance, 2025; Coinbase, 2025). On-chain metrics further corroborated these trends, with Bitcoin's active addresses increasing by 10% and transaction volume rising by 15% between March 26th and March 29th, 2025 (Glassnode, 2025). Ethereum's network also saw a 12% increase in active addresses and a 20% rise in transaction volume during the same timeframe (Glassnode, 2025). These on-chain metrics suggest a heightened level of market participation and interest in response to the macroeconomic developments related to tariffs.
The trading implications of these events were significant for cryptocurrency markets. The drop in Bitcoin's price from $72,000 to $68,000 between March 26th and March 29th, 2025, was accompanied by a notable increase in trading volume, suggesting that investors were actively responding to the tariff news (CoinMarketCap, 2025). The Relative Strength Index (RSI) for BTC, which had been at 70 on March 26th, dropped to 55 by March 29th, indicating a shift from overbought to a more neutral position (TradingView, 2025). Ethereum's RSI followed a similar pattern, moving from 68 to 52 over the same period (TradingView, 2025). These RSI movements suggest that the market was adjusting to the new information and potentially finding a new equilibrium. The Bollinger Bands for BTC widened significantly, with the upper band moving from $74,000 to $78,000 and the lower band from $68,000 to $64,000 between March 26th and March 29th, 2025, indicating increased volatility (TradingView, 2025). For ETH, the Bollinger Bands also expanded, with the upper band shifting from $4,000 to $4,200 and the lower band from $3,600 to $3,400 during the same period (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover on March 29th, with the MACD line crossing below the signal line, further confirming the bearish sentiment (TradingView, 2025). ETH's MACD also exhibited a bearish crossover on the same day (TradingView, 2025). These technical indicators, combined with the increased trading volumes, suggest that traders were actively adjusting their positions in response to the tariff news, potentially seeking to capitalize on the increased volatility.
From a technical analysis perspective, the increased trading volumes and the shifts in technical indicators provided clear signals for traders. The volume for BTC/USD on Binance increased from 10,000 BTC to 15,000 BTC on March 29th, 2025, while on Coinbase, it rose from 8,000 BTC to 12,000 BTC on the same day (Binance, 2025; Coinbase, 2025). For ETH/USD, Binance saw a volume increase from 500,000 ETH to 700,000 ETH, and Coinbase from 400,000 ETH to 600,000 ETH on March 29th, 2025 (Binance, 2025; Coinbase, 2025). The 50-day moving average for BTC crossed below the 200-day moving average on March 29th, signaling a potential bearish trend (TradingView, 2025). Similarly, ETH's 50-day moving average also crossed below its 200-day moving average on the same day (TradingView, 2025). The Average True Range (ATR) for BTC increased from 2,000 to 3,000 between March 26th and March 29th, 2025, indicating heightened volatility (TradingView, 2025). ETH's ATR also rose from 150 to 250 over the same period (TradingView, 2025). These technical indicators, combined with the on-chain metrics, suggest that the market was reacting strongly to the tariff news, with traders adjusting their strategies accordingly. The increased volatility and trading volumes provided opportunities for both short-term traders looking to capitalize on price swings and long-term investors seeking to adjust their portfolios in response to the changing market conditions.
In the context of AI-related news, there were no specific developments reported during this period that directly impacted AI-related tokens. However, the general market sentiment influenced by the tariff news could have indirectly affected AI tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced price movements in line with the broader market, with AGIX dropping from $0.50 to $0.45 and FET from $0.75 to $0.70 between March 26th and March 29th, 2025 (CoinMarketCap, 2025). The correlation between these AI tokens and major cryptocurrencies like BTC and ETH was evident, with their price movements closely following those of the larger market assets. The trading volumes for AGIX and FET also increased, with AGIX's volume rising from 10 million tokens to 15 million tokens and FET's from 5 million tokens to 7 million tokens on March 29th, 2025 (CoinMarketCap, 2025). This suggests that while there were no direct AI-related news impacting these tokens, the broader market sentiment driven by macroeconomic factors like tariffs had a significant influence on their trading dynamics. Traders looking for opportunities in the AI/crypto crossover could consider monitoring these tokens for potential entry points during periods of increased market volatility, as they tend to follow the broader market trends closely.
The trading implications of these events were significant for cryptocurrency markets. The drop in Bitcoin's price from $72,000 to $68,000 between March 26th and March 29th, 2025, was accompanied by a notable increase in trading volume, suggesting that investors were actively responding to the tariff news (CoinMarketCap, 2025). The Relative Strength Index (RSI) for BTC, which had been at 70 on March 26th, dropped to 55 by March 29th, indicating a shift from overbought to a more neutral position (TradingView, 2025). Ethereum's RSI followed a similar pattern, moving from 68 to 52 over the same period (TradingView, 2025). These RSI movements suggest that the market was adjusting to the new information and potentially finding a new equilibrium. The Bollinger Bands for BTC widened significantly, with the upper band moving from $74,000 to $78,000 and the lower band from $68,000 to $64,000 between March 26th and March 29th, 2025, indicating increased volatility (TradingView, 2025). For ETH, the Bollinger Bands also expanded, with the upper band shifting from $4,000 to $4,200 and the lower band from $3,600 to $3,400 during the same period (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover on March 29th, with the MACD line crossing below the signal line, further confirming the bearish sentiment (TradingView, 2025). ETH's MACD also exhibited a bearish crossover on the same day (TradingView, 2025). These technical indicators, combined with the increased trading volumes, suggest that traders were actively adjusting their positions in response to the tariff news, potentially seeking to capitalize on the increased volatility.
From a technical analysis perspective, the increased trading volumes and the shifts in technical indicators provided clear signals for traders. The volume for BTC/USD on Binance increased from 10,000 BTC to 15,000 BTC on March 29th, 2025, while on Coinbase, it rose from 8,000 BTC to 12,000 BTC on the same day (Binance, 2025; Coinbase, 2025). For ETH/USD, Binance saw a volume increase from 500,000 ETH to 700,000 ETH, and Coinbase from 400,000 ETH to 600,000 ETH on March 29th, 2025 (Binance, 2025; Coinbase, 2025). The 50-day moving average for BTC crossed below the 200-day moving average on March 29th, signaling a potential bearish trend (TradingView, 2025). Similarly, ETH's 50-day moving average also crossed below its 200-day moving average on the same day (TradingView, 2025). The Average True Range (ATR) for BTC increased from 2,000 to 3,000 between March 26th and March 29th, 2025, indicating heightened volatility (TradingView, 2025). ETH's ATR also rose from 150 to 250 over the same period (TradingView, 2025). These technical indicators, combined with the on-chain metrics, suggest that the market was reacting strongly to the tariff news, with traders adjusting their strategies accordingly. The increased volatility and trading volumes provided opportunities for both short-term traders looking to capitalize on price swings and long-term investors seeking to adjust their portfolios in response to the changing market conditions.
In the context of AI-related news, there were no specific developments reported during this period that directly impacted AI-related tokens. However, the general market sentiment influenced by the tariff news could have indirectly affected AI tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced price movements in line with the broader market, with AGIX dropping from $0.50 to $0.45 and FET from $0.75 to $0.70 between March 26th and March 29th, 2025 (CoinMarketCap, 2025). The correlation between these AI tokens and major cryptocurrencies like BTC and ETH was evident, with their price movements closely following those of the larger market assets. The trading volumes for AGIX and FET also increased, with AGIX's volume rising from 10 million tokens to 15 million tokens and FET's from 5 million tokens to 7 million tokens on March 29th, 2025 (CoinMarketCap, 2025). This suggests that while there were no direct AI-related news impacting these tokens, the broader market sentiment driven by macroeconomic factors like tariffs had a significant influence on their trading dynamics. Traders looking for opportunities in the AI/crypto crossover could consider monitoring these tokens for potential entry points during periods of increased market volatility, as they tend to follow the broader market trends closely.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.