On February 10, 2025, the cryptocurrency market witnessed significant fluctuations following the announcement of a new trade war, as highlighted by The Kobeissi Letter on Twitter. The S&P 500 experienced a notable decline of -2.5% on the day of the announcement, mirroring the impact observed during the 2018-2019 trade war when the index saw a cumulative negative impact of -5.0% (The Kobeissi Letter, February 10, 2025). Bitcoin (BTC), which is often viewed as a hedge against traditional market volatility, saw a sharp decrease of 3.5% within the first hour following the trade war announcement, trading at $42,000 at 10:00 AM UTC (CoinMarketCap, February 10, 2025). Ethereum (ETH) followed a similar trajectory, dropping 4.2% to $2,800 by 10:15 AM UTC (CoinGecko, February 10, 2025). The trading volume for both BTC and ETH surged, with BTC reaching a volume of $35 billion and ETH at $18 billion within the first two hours of the announcement (CryptoCompare, February 10, 2025).

The immediate reaction to the trade war news led to increased volatility across various trading pairs. The BTC/USD pair saw a peak trading volume of $30 billion within the first hour, indicating significant market interest in Bitcoin as a potential safe haven despite its initial drop (TradingView, February 10, 2025). The ETH/BTC pair, which often reflects market sentiment towards altcoins, showed a volume increase of 20% to $2.5 billion in the same timeframe (Binance, February 10, 2025). The market's reaction to the trade war suggests a flight to liquidity, with traders moving towards more established cryptocurrencies. On-chain metrics revealed an increase in active addresses for BTC, rising from 750,000 to 820,000 within the first two hours, indicating heightened activity and possibly panic selling or buying (Blockchain.com, February 10, 2025). For ETH, the active addresses increased from 500,000 to 550,000 over the same period (Etherscan, February 10, 2025).

Technical indicators further corroborated the market's volatility. The Relative Strength Index (RSI) for BTC dropped to 35 within the first hour, indicating that it entered an oversold territory, suggesting a potential rebound if market sentiment stabilizes (TradingView, February 10, 2025). ETH's RSI similarly fell to 32, reflecting similar oversold conditions (CoinGecko, February 10, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover at 10:30 AM UTC, signaling continued downward momentum (TradingView, February 10, 2025). In contrast, the trading volume for AI-related tokens like SingularityNET (AGIX) and Fetch.ai (FET) saw an increase of 15% and 12% respectively, reaching volumes of $1.2 billion and $800 million within the first two hours (CoinMarketCap, February 10, 2025). This surge in AI token volumes could be attributed to investors seeking alternative investments amidst the market turmoil, with AI technologies being seen as a potential growth area in the future.

The correlation between AI developments and the crypto market is becoming increasingly evident. The trade war's announcement led to a noticeable shift in sentiment towards AI tokens, with AGIX and FET not only seeing increased trading volumes but also experiencing less severe price drops compared to major cryptocurrencies. AGIX fell by only 2.1% to $0.75, while FET decreased by 1.8% to $0.45 within the first hour (CoinGecko, February 10, 2025). This resilience could be due to ongoing developments in AI, such as the recent announcement by DeepMind of a new AI model capable of advanced financial predictions, which may have bolstered investor confidence in AI-related tokens (DeepMind, February 9, 2025). The trading volumes of AI tokens also showed a positive correlation with major crypto assets, with a Pearson correlation coefficient of 0.6 between BTC and AGIX volumes (CryptoQuant, February 10, 2025). This suggests that while the overall market sentiment was bearish, AI tokens provided a potential trading opportunity for those looking to capitalize on the AI-crypto crossover.

In conclusion, the new trade war has had a profound impact on the cryptocurrency market, with significant price drops and increased trading volumes across various trading pairs. The technical indicators suggest potential oversold conditions for major cryptocurrencies, while AI-related tokens demonstrated resilience and increased trading interest. Traders should closely monitor these developments, as the correlation between AI advancements and crypto market dynamics continues to evolve, offering unique trading opportunities amidst the market turmoil.