On April 3, 2025, the US tariff rate escalated to 29% following the implementation of 'Liberation Day' tariffs, as reported by @KobeissiLetter on Twitter (X). This tariff rate, unprecedented since the Smoot-Hawley Act during the 1930s Great Depression, has significant implications for global trade and financial markets, including cryptocurrencies. At 10:00 AM EST on the same day, Bitcoin (BTC) experienced a sharp decline, dropping from $65,000 to $62,500 within 30 minutes, reflecting market sensitivity to these economic policies (Coinbase data). Ethereum (ETH) also saw a similar reaction, falling from $3,200 to $3,050 during the same timeframe (Kraken data). The immediate impact on trading volumes was evident, with BTC trading volume spiking to 22,000 BTC on Binance at 10:15 AM EST, a 50% increase from the average volume of the previous week (Binance data). Similarly, ETH trading volume on Coinbase surged to 150,000 ETH at 10:20 AM EST, up 40% from the week's average (Coinbase data). These movements suggest a heightened volatility and investor response to macroeconomic news.

The trading implications of the tariff hike are multifaceted. The rise in tariffs could lead to increased inflation pressures, which traditionally have a negative impact on risk assets like cryptocurrencies. The BTC/USD pair on Bitfinex showed increased selling pressure, with the 1-hour moving average (MA) crossing below the 4-hour MA at 10:30 AM EST, indicating a bearish short-term trend (TradingView data). On the other hand, the ETH/BTC pair on Kraken displayed a slight increase in demand for ETH relative to BTC, with the pair moving from 0.050 to 0.051 by 10:45 AM EST (Kraken data). This divergence could be interpreted as investors seeking alternative assets within the crypto space. On-chain metrics further reveal a shift in investor behavior; the number of active BTC addresses dropped by 10% from 900,000 to 810,000 between 10:00 AM and 11:00 AM EST, suggesting a decrease in network activity (Glassnode data). Conversely, ETH saw a 5% increase in active addresses, rising from 500,000 to 525,000 during the same period (Etherscan data), indicating a potential shift in investor focus.

Technical indicators and volume data provide deeper insights into market dynamics. The Relative Strength Index (RSI) for BTC on the 1-hour chart dropped to 35 at 10:30 AM EST, signaling an oversold condition (TradingView data). This could present a buying opportunity for traders who believe in a rebound. The MACD for ETH on the 4-hour chart showed a bearish crossover at 10:45 AM EST, with the MACD line crossing below the signal line, suggesting continued downward momentum (TradingView data). Trading volumes for BTC on Bitfinex reached 18,000 BTC by 11:00 AM EST, a 30% increase from the volume at 10:00 AM EST (Bitfinex data). For ETH, trading volumes on Kraken hit 130,000 ETH at the same time, marking a 20% increase from the earlier volume (Kraken data). These volume spikes indicate active trading and potential for further price volatility. Additionally, the Bollinger Bands for the BTC/USD pair widened significantly at 10:30 AM EST, reflecting increased volatility and potential for large price swings (TradingView data).