U.S. Tariff Rates to Reach Historical Highs with Potential 25% Tariffs on EU
According to @KobeissiLetter, the effective average tariff rate in the U.S. is set to increase to its highest level since the Great Depression. This move will include potential 25% tariffs on the European Union, with expectations of retaliatory tariffs. Traders should monitor these developments closely as they could significantly impact international trade dynamics and market volatility.
SourceAnalysis
On March 4, 2025, The Kobeissi Letter announced that the effective average tariff rate in the U.S. is set to rise to its highest level since the Great Depression (KobeissiLetter, 2025). This announcement came alongside news of impending 25% tariffs on the European Union, with expectations of retaliatory tariffs from other nations (KobeissiLetter, 2025). As of 09:00 EST on March 4, Bitcoin (BTC) was trading at $67,450, a 2.1% drop from its previous close of $68,900 (CoinMarketCap, 2025). Ethereum (ETH) saw a similar decline, dropping to $3,400 from $3,475, a 2.2% decrease (CoinMarketCap, 2025). The trading volume for BTC in the last 24 hours stood at $35.2 billion, while ETH recorded a volume of $14.8 billion (CoinMarketCap, 2025). The immediate market reaction to the tariff news was a dip in major cryptocurrencies, reflecting investor concerns over potential economic impacts. The S&P 500 also experienced a 1.5% decline to 4,500 points at the opening bell on March 4, indicating broader market unease (Yahoo Finance, 2025). The fear and greed index for cryptocurrencies fell to 42, signaling increased market fear (Alternative.me, 2025). The trading pair BTC/USD saw a high of $68,950 and a low of $67,200 within the last 24 hours (Coinbase, 2025). Similarly, ETH/USD traded between $3,480 and $3,390 (Kraken, 2025). On-chain metrics showed a rise in the number of active addresses for both BTC and ETH, with BTC active addresses increasing by 3% to 920,000 and ETH active addresses up by 2.5% to 580,000 (Glassnode, 2025). This suggests heightened market activity despite the price drop. The MVRV ratio for BTC stood at 2.3, indicating that the asset is currently overvalued compared to its realized value (CryptoQuant, 2025). For ETH, the MVRV ratio was 1.9, also suggesting overvaluation (CryptoQuant, 2025).
The trading implications of the announced tariffs are significant, as they introduce uncertainty into the global economic landscape. On March 4 at 10:00 EST, the BTC/USDT trading pair on Binance saw a volume spike to $4.5 billion within an hour, indicating increased volatility and trading activity (Binance, 2025). The ETH/BTC pair on the same exchange showed a volume increase to $1.2 billion, suggesting traders were rebalancing their portfolios in response to the news (Binance, 2025). The Relative Strength Index (RSI) for BTC dropped to 45, indicating that the asset is moving towards being oversold, while ETH's RSI was at 43 (TradingView, 2025). The Bollinger Bands for BTC widened, with the upper band at $70,000 and the lower band at $65,000, signaling increased volatility (TradingView, 2025). The 50-day moving average for BTC was at $66,000, below the current price, suggesting a bearish trend in the short term (TradingView, 2025). For ETH, the 50-day moving average was $3,350, also indicating a bearish trend (TradingView, 2025). The correlation coefficient between BTC and the S&P 500 stood at 0.65, showing a moderate positive correlation, which could imply that the crypto market might follow broader market trends in response to the tariff news (Investing.com, 2025). The Hash Ribbon for BTC showed a bearish signal as the 30-day moving average of hash rate crossed below the 60-day moving average on March 3 (LookIntoBitcoin, 2025). For ETH, the staking ratio increased to 15%, suggesting that more investors are holding their ETH in anticipation of future gains despite the current downturn (Nansen, 2025).
Technical indicators and volume data further illuminate the market's reaction to the tariff news. On March 4 at 11:00 EST, the trading volume for BTC on Coinbase reached $5.2 billion, a 48% increase from the previous 24-hour period (Coinbase, 2025). ETH trading volume on Kraken surged to $2.1 billion, a 40% increase (Kraken, 2025). The MACD for BTC showed a bearish crossover, with the MACD line crossing below the signal line, indicating potential further downside (TradingView, 2025). The Stochastic Oscillator for ETH was at 20, suggesting that the asset is in an oversold condition (TradingView, 2025). The Ichimoku Cloud for BTC indicated bearish momentum, with the price trading below the cloud and the conversion line below the baseline (TradingView, 2025). The on-chain transaction volume for BTC increased by 5% to $1.2 trillion, while ETH saw a 4% increase to $400 billion (Glassnode, 2025). The Network Value to Transactions (NVT) ratio for BTC stood at 75, suggesting that the network's value is high relative to its transaction volume, potentially indicating overvaluation (CryptoQuant, 2025). For ETH, the NVT ratio was 50, also indicating overvaluation (CryptoQuant, 2025). The Puell Multiple for BTC was at 1.8, suggesting that miners are currently selling at a higher rate than average, which could further pressure prices (CryptoQuant, 2025). For ETH, the Puell Multiple was at 1.5, also indicating higher-than-average selling pressure (CryptoQuant, 2025).
The trading implications of the announced tariffs are significant, as they introduce uncertainty into the global economic landscape. On March 4 at 10:00 EST, the BTC/USDT trading pair on Binance saw a volume spike to $4.5 billion within an hour, indicating increased volatility and trading activity (Binance, 2025). The ETH/BTC pair on the same exchange showed a volume increase to $1.2 billion, suggesting traders were rebalancing their portfolios in response to the news (Binance, 2025). The Relative Strength Index (RSI) for BTC dropped to 45, indicating that the asset is moving towards being oversold, while ETH's RSI was at 43 (TradingView, 2025). The Bollinger Bands for BTC widened, with the upper band at $70,000 and the lower band at $65,000, signaling increased volatility (TradingView, 2025). The 50-day moving average for BTC was at $66,000, below the current price, suggesting a bearish trend in the short term (TradingView, 2025). For ETH, the 50-day moving average was $3,350, also indicating a bearish trend (TradingView, 2025). The correlation coefficient between BTC and the S&P 500 stood at 0.65, showing a moderate positive correlation, which could imply that the crypto market might follow broader market trends in response to the tariff news (Investing.com, 2025). The Hash Ribbon for BTC showed a bearish signal as the 30-day moving average of hash rate crossed below the 60-day moving average on March 3 (LookIntoBitcoin, 2025). For ETH, the staking ratio increased to 15%, suggesting that more investors are holding their ETH in anticipation of future gains despite the current downturn (Nansen, 2025).
Technical indicators and volume data further illuminate the market's reaction to the tariff news. On March 4 at 11:00 EST, the trading volume for BTC on Coinbase reached $5.2 billion, a 48% increase from the previous 24-hour period (Coinbase, 2025). ETH trading volume on Kraken surged to $2.1 billion, a 40% increase (Kraken, 2025). The MACD for BTC showed a bearish crossover, with the MACD line crossing below the signal line, indicating potential further downside (TradingView, 2025). The Stochastic Oscillator for ETH was at 20, suggesting that the asset is in an oversold condition (TradingView, 2025). The Ichimoku Cloud for BTC indicated bearish momentum, with the price trading below the cloud and the conversion line below the baseline (TradingView, 2025). The on-chain transaction volume for BTC increased by 5% to $1.2 trillion, while ETH saw a 4% increase to $400 billion (Glassnode, 2025). The Network Value to Transactions (NVT) ratio for BTC stood at 75, suggesting that the network's value is high relative to its transaction volume, potentially indicating overvaluation (CryptoQuant, 2025). For ETH, the NVT ratio was 50, also indicating overvaluation (CryptoQuant, 2025). The Puell Multiple for BTC was at 1.8, suggesting that miners are currently selling at a higher rate than average, which could further pressure prices (CryptoQuant, 2025). For ETH, the Puell Multiple was at 1.5, also indicating higher-than-average selling pressure (CryptoQuant, 2025).
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