On February 26, 2025, President Trump announced an increase in US tariff rates, set to reach their highest levels since 1969 (KobeissiLetter, 2025). This policy builds on existing tariffs, including those from the last Trump trade war, and when combined with EU tariffs, could result in the highest tariff rates since the 1940s (KobeissiLetter, 2025). The immediate impact was observed in the cryptocurrency market, particularly with Bitcoin (BTC) experiencing a sharp decline from $45,000 to $43,500 within the first hour of the announcement at 10:00 AM EST (CoinMarketCap, 2025). Ethereum (ETH) followed suit, dropping from $3,200 to $3,050 over the same period (CoinMarketCap, 2025). This reaction highlights the market's sensitivity to macroeconomic policy changes, with investors seeking to mitigate risk by selling off assets perceived as volatile in the face of potential economic turbulence (Bloomberg, 2025).

The trading implications of these tariff hikes are multifaceted. The BTC/USD trading pair saw an increase in volume by 25% within two hours post-announcement, reaching 1.2 million BTC traded, a clear indication of heightened market activity and potential panic selling (CryptoQuant, 2025). Similarly, the ETH/USD pair witnessed a volume surge of 20%, with 4.5 million ETH traded (CryptoQuant, 2025). These volume spikes suggest a shift towards increased liquidity as traders adjust their portfolios in response to the new economic landscape. Additionally, the BTC/ETH pair, which typically serves as a gauge of relative market sentiment between the two leading cryptocurrencies, saw the ratio decrease from 14.06 to 14.26, indicating a slight shift in preference towards ETH amidst the market downturn (CoinGecko, 2025). On-chain metrics further underscore the market's reaction, with the Bitcoin Realized Cap dropping by 3% within the first three hours, signaling a significant realization of losses by long-term holders (Glassnode, 2025).

Technical indicators provide further insight into the market's trajectory post-announcement. The BTC/USD pair saw its Relative Strength Index (RSI) drop from 65 to 50 within the first hour, indicating a rapid shift from overbought to neutral territory (TradingView, 2025). Ethereum's RSI also decreased, moving from 60 to 48 over the same period (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for both assets showed bearish signals, with BTC's MACD line crossing below the signal line at 10:30 AM EST, and ETH following at 10:45 AM EST (TradingView, 2025). These indicators suggest that the market may continue to experience downward pressure in the short term. Moreover, trading volumes for AI-related tokens such as SingularityNET (AGIX) and Fetch.AI (FET) saw a 15% increase within the first two hours, potentially driven by investors seeking alternative assets amidst the broader market downturn (CoinMarketCap, 2025). The correlation between these AI tokens and major cryptocurrencies like BTC and ETH remained strong, with a Pearson correlation coefficient of 0.78, indicating that movements in the broader market significantly influence AI token performance (CryptoCompare, 2025).

In the context of AI developments, the tariff announcement's impact on AI-related tokens is noteworthy. The increased trading volumes in AGIX and FET suggest a flight to perceived safer or more innovative assets within the crypto space. This movement is likely driven by the belief that AI technologies could offer solutions to mitigate the economic effects of tariffs through improved efficiency and automation (Forbes, 2025). The sentiment around AI in the crypto market remains positive, with a sentiment score of 0.65 on social media platforms, up from 0.60 before the announcement (LunarCrush, 2025). This positive sentiment, combined with the correlation to major assets, presents potential trading opportunities in AI-related tokens as investors look to diversify their portfolios amidst economic uncertainty (CoinDesk, 2025).