Well, that escalated quickly. Major crypto tokens took a bit of a nosedive on Saturday after Moody’s decided to rain on everyone’s parade by downgrading the U.S. credit rating. Ether (ETH), XRP, and everyone’s favorite meme token, dogecoin (DOGE), each lost about 3% of their value.
The overall crypto market still strutted around with a $3.3 trillion cap but trimmed earlier gains after brushing up against the week’s high. Classic case of “almost made it.”
Moody’s took the U.S. down a notch from its shiny Aaa rating to Aa1, citing bloated deficits, climbing interest payments, and, no surprise here, political gridlock. Basically, Uncle Sam’s credit score just got dinged, and now Moody’s is sitting at the same table as Fitch and S&P, who already gave the U.S. the side-eye.
The White House, never one to miss a beat, fired back. Spokespeople for President Donald Trump (yes, him again) labeled the downgrade as a politically loaded move. Drama, anyone?
Bitcoin Holds Strong but for How Long?
The effect was immediate in traditional markets: U.S. Treasury yields popped, with the 10-year note jumping to 4.49%. Meanwhile, S&P 500 futures slipped 0.6% after hours, the financial equivalent of a collective groan.
Normally, concerns over U.S. debt and the weakening dollar play well for bitcoin and other decentralized darlings. But when the credit rating drops, markets can panic a little, with institutional investors pulling back like it’s hot.
And according to some sharp-eyed traders, we might not be out of the woods just yet. Profit-taking is in full swing, and a deeper sell-off could be on the horizon.
“Bitcoin is holding the $104,000 mark as a key level, and the positive factor is that sellers haven’t snatched the steering wheel just yet,” said Alex Kuptsikevich, FxPro’s chief market analyst. “But don’t get too comfy. There’s pressure building near the top, and this calm might be the teaser before another drop.”
In other words, buckle up, things could get bumpier before the next big bounce.
HODL Team
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