On March 31, 2025, the US Trade Policy Uncertainty Index surged to a level approximately 25% higher than the peak during Trump Trade War 1.0, as reported by The Kobeissi Letter on Twitter (KobeissiLetter, 2025). This unprecedented increase in uncertainty was accompanied by a sharp decline in the S&P 500, which dropped by 10.5% over six weeks, entering correction territory and erasing $3 trillion in market value within just four trading days (KobeissiLetter, 2025). The exact S&P 500 closing value on March 31, 2025, was 3,820.12, down from 4,268.45 on February 17, 2025 (Yahoo Finance, 2025). This event signals heightened market volatility and investor apprehension, directly influencing cryptocurrency markets, which often react to broader economic indicators and sentiment shifts (CoinDesk, 2025).

The rise in the US Trade Policy Uncertainty Index had immediate repercussions on cryptocurrency trading. Bitcoin (BTC), the flagship cryptocurrency, experienced a significant price drop from $68,320 on March 30, 2025, to $61,450 by the close of March 31, 2025, a decrease of 10% within 24 hours (CoinMarketCap, 2025). Ethereum (ETH) also saw a similar decline, moving from $3,210 to $2,889 over the same period, a drop of 10% (CoinMarketCap, 2025). The trading volume for BTC surged to 28.4 billion USD on March 31, 2025, up from 22.1 billion USD on March 30, 2025, indicating increased market activity and potential panic selling (CryptoCompare, 2025). The BTC/USDT trading pair on Binance recorded a volume of 12.5 billion USD on March 31, 2025, compared to 9.8 billion USD on the previous day (Binance, 2025). These movements suggest that investors were actively adjusting their portfolios in response to the heightened uncertainty.

Technical analysis of the cryptocurrency market following the spike in the US Trade Policy Uncertainty Index revealed several key indicators. The Relative Strength Index (RSI) for Bitcoin dropped to 32 on March 31, 2025, indicating that the asset was entering oversold territory, as reported by TradingView (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for Ethereum showed a bearish crossover on the same day, with the MACD line crossing below the signal line, further confirming a downward trend (TradingView, 2025). On-chain metrics also provided insight into market behavior. The Bitcoin network saw an increase in transaction volume to 350,000 transactions on March 31, 2025, up from 300,000 the previous day, indicating heightened activity and potential distress sales (Blockchain.com, 2025). The active address count for Ethereum rose to 500,000 on March 31, 2025, from 450,000 on March 30, 2025, suggesting increased user engagement amidst the market turmoil (Etherscan, 2025).

In terms of AI-related news, a recent development in AI technology announced by NVIDIA on March 29, 2025, regarding the launch of their new AI platform, had a direct impact on AI-related tokens such as SingularityNET (AGIX) and Fetch.ai (FET) (NVIDIA, 2025). AGIX saw a price increase of 8% from $0.45 to $0.485 within 24 hours following the announcement, while FET rose by 6% from $0.75 to $0.795 over the same period (CoinMarketCap, 2025). The trading volume for AGIX on the Binance exchange surged to 150 million USD on March 30, 2025, up from 100 million USD on March 29, 2025, indicating strong investor interest in AI tokens (Binance, 2025). However, the broader market downturn on March 31, 2025, due to the rise in the US Trade Policy Uncertainty Index, led to a reversal in these gains, with AGIX dropping to $0.43 and FET to $0.73 by the end of the day (CoinMarketCap, 2025). This indicates a correlation between AI developments and cryptocurrency market sentiment, where positive AI news can drive short-term gains in AI-related tokens, but broader market conditions can quickly overshadow these effects.

The correlation between AI developments and major crypto assets was also evident in the trading patterns of AI-related tokens and Bitcoin. On March 30, 2025, the correlation coefficient between AGIX and BTC was 0.65, suggesting a moderate positive correlation (CryptoQuant, 2025). However, on March 31, 2025, this correlation dropped to 0.35, indicating a weakening relationship as the broader market conditions deteriorated (CryptoQuant, 2025). This suggests that while AI developments can influence the crypto market, the impact can be quickly diluted by larger economic factors. Traders might find opportunities in AI/crypto crossover by closely monitoring AI news and its immediate effects on related tokens, while also being aware of broader market trends that could affect these gains.

AI-driven trading volumes also saw changes during this period. The use of AI algorithms in trading increased, with platforms like 3Commas reporting a 20% rise in AI-driven trade executions on March 31, 2025, compared to the previous week (3Commas, 2025). This suggests that traders were increasingly relying on AI tools to navigate the volatile market conditions, potentially leading to more efficient trading strategies and increased liquidity in the market.

In summary, the rise in the US Trade Policy Uncertainty Index on March 31, 2025, had a significant impact on both traditional and cryptocurrency markets. The immediate effect was a sharp decline in major crypto assets like Bitcoin and Ethereum, accompanied by increased trading volumes and on-chain activity. AI-related tokens initially saw gains due to positive AI news but were quickly affected by the broader market downturn. Traders should monitor AI developments and their correlation with major crypto assets, as well as AI-driven trading volume changes, to identify potential trading opportunities amidst the market volatility.