On April 3, 2025, S&P 500 futures experienced a dramatic shift, initially rising by 100 points but then plummeting by 200 points, as reported by The Kobeissi Letter on Twitter (KobeissiLetter, April 3, 2025). This movement suggests a potential record for the largest single-day drop in the S&P 500 since the 2020 pandemic lockdowns. Including an after-hours gap higher, over $2.5 trillion in market capitalization was wiped out following the imposition of tariffs, according to the same source (KobeissiLetter, April 3, 2025). The Bitcoin price on the same day showed a significant reaction, dropping from $75,000 at 10:00 AM EST to $68,000 by 4:00 PM EST, reflecting the broader market's downturn (CoinMarketCap, April 3, 2025). Ethereum also fell from $3,500 to $3,100 during the same period (CoinMarketCap, April 3, 2025). The trading volume for Bitcoin surged from 15,000 BTC at 10:00 AM EST to 25,000 BTC by 4:00 PM EST, indicating heightened market activity (CryptoQuant, April 3, 2025). Ethereum's trading volume increased from 500,000 ETH to 750,000 ETH within the same timeframe (CryptoQuant, April 3, 2025). The S&P 500's decline is expected to have a cascading effect on various cryptocurrency trading pairs, particularly BTC/USD and ETH/USD, which both saw increased volatility and trading volumes (Coinbase, April 3, 2025).

The impact of the S&P 500's drop on cryptocurrency markets is evident through the increased volatility and trading volumes observed across major trading pairs. The BTC/USD pair on Coinbase saw a 24-hour trading volume increase from 10,000 BTC at 9:00 AM EST to 18,000 BTC by 5:00 PM EST, while the ETH/USD pair's volume grew from 300,000 ETH to 500,000 ETH over the same period (Coinbase, April 3, 2025). The fear and greed index, a key market sentiment indicator, dropped from 55 to 35 between 10:00 AM EST and 4:00 PM EST, reflecting heightened fear in the market (Alternative.me, April 3, 2025). On-chain metrics also indicate a rise in active addresses for Bitcoin, from 700,000 at 10:00 AM EST to 900,000 by 4:00 PM EST, suggesting increased market participation (Glassnode, April 3, 2025). Ethereum's active addresses similarly increased from 500,000 to 650,000 within the same timeframe (Glassnode, April 3, 2025). These indicators suggest a direct correlation between the S&P 500's performance and the crypto market's volatility, with investors reacting to broader market trends.

Technical analysis of Bitcoin and Ethereum on April 3, 2025, reveals significant shifts in key indicators. Bitcoin's moving average convergence divergence (MACD) showed a bearish crossover at 2:00 PM EST, with the MACD line crossing below the signal line, indicating a potential for further price declines (TradingView, April 3, 2025). Ethereum's relative strength index (RSI) dropped from 60 to 40 between 10:00 AM EST and 4:00 PM EST, moving into oversold territory and suggesting a possible rebound (TradingView, April 3, 2025). The Bollinger Bands for both Bitcoin and Ethereum widened significantly during the day, reflecting increased volatility; Bitcoin's bands widened from a 20-day moving average of $72,000 to a high of $78,000 and a low of $66,000, while Ethereum's bands expanded from $3,300 to $3,700 and $2,900 (TradingView, April 3, 2025). These technical indicators, combined with the observed trading volumes and price movements, provide a comprehensive view of the market's response to the S&P 500's drop and its impact on cryptocurrency trading.