Major cryptocurrencies such as Ether (ETH), Ripple and Dogecoin (DOGE) XRP experienced a drop of about 3% to 5% on Saturday after taking Moody’s rating decision to reduce the US sovereignty rating from AAA to AA1.
The measure was cited in a report published on May 16th this year, and the rise in deficits, increasing interest costs, and lack of political will to manage spending immediately had an impact on traditional and cryptocurrency markets.
The document explains for a decade that “US federal debt has risen sharply due to the ongoing fiscal deficit,” citing higher interest rate pressures.
“This magnitude reduction on the 21-level qualification scale reflects a significantly higher level of public debt and interest payments for more than 10 years than similarly qualified sovereigns,” he adds.
Ether, Ethereum cryptocurrency, and the second cryptocurrency of market capitalization; 5.80% has receved in the last 24 hours, The balance over the past seven days has been positive, with a revaluation of about 2% over that period. Its price is at $2,450 at the time of writing.
As reported by Cryptonotics, Ethereum has experienced the biggest recent code update called Pectra. As a result, the network increased its activity and token burning, promoting the value of ether.
for that, XRP retracted 4.5% this Saturday from 2.43 to $2.32 per token. This reaffirmed the trends over the past five weeks despite rebounding to $2.61 mid-week.
The upward trend in XRP was predicted by the formation of a bullish flag, identified at the beginning of May. The media announced the launch of three new XRP ETFs after the end of April, adding to other requests for this type of financial product.
The formation of this technical analysis pattern is characterized by strong initial movements followed by a integration phase, converging with a reduction in maximum and lowest prices. Once this pattern is resolved, there is usually a significant upward movement, as seen in the following image.
However, the macroeconomic context seemed to be muting this market impulse. An analysis of this medium suggests that it could be a missing Chipa, as XRP prices reached a maximum that was not seen since mid-March, with only the resolution of the flame “customs war” that reached a 90-day break between the US and China this week.
Another currency has taken a step back due to a reduction in US credit ratings. uu. It was a dog coin. Your contractions It reached 6.7% in 24 hours, Change the price to $0.21.
The token reached the $2 mark in early May, appearing to have consolidated this week’s trends.
The explanation was the 10-day index (EMA) mobile average rise, which was upwards for over 20 days at the end of April. This reflects signs of strength from technical analysis, so if today’s fall is just a temporary one, it can still be expected.
The relevance of this technical signal is that when the 10-day EMA exceeds 20 and above 20, short-term impulses are gaining strength. In fact, he suggests that buyers dominate the market in an increasingly sustainable way.
Most of the main cryptocurrencies experienced a decline in prices, The market, worth $3.3 billion, has lost some of its recent profits after reaching its weekly maximum.
Reducing the moody US credit qualifications Decade bonuses rose to 4.49%, while S&P 500 futures fell by 0.6% Operations outside business hours.
Political and economic contexts
The White House, through Donald Trump’s spokesman Stephen Chong, pointed to Moody’s analytical economist Mark Zandy, pointed out Moody’s analytical economist Mark Zandy, who said in X that “no one takes their analysis seriously.”
The cut coincided with a congressional set-off of the Trump Tax and Cost Bill, blocked by Republicans who demanded deeper spending cuts. The extension of the 2017 tax cut, considered a base case for Moody’s, could add $4 billion to its major fiscal deficit over the next decade.
Historically, concerns about the sustainability of American debt have encouraged decentralized assets such as Bitcoin. Credit sales usually create short-term risk aversion. The reduction reflects a decline in foreign demand for treasured bonds and an increase in debt to refinance. Darrell Duffy, a former member of the Moody’s Board of Directors, stressed the need for fiscal discipline through greater revenue or spending cuts.
Market outlook
FXPRO Market Chief Analyst Alex Kuptsikevich warned that Bitcoin remains at a critical level of USD 104,000, but that the acquisition of revenue could potentially lead to the deepest decline in the short term. “The high level of resilience is temporary before the next rebound and there is considerable pressure near the upper limit of the current range,” he said.
Despite macroeconomic uncertainty, some analysts have suggested that a dollar devaluation could benefit long-term cryptocurrency, but volatility persists on the nearby horizon.