The altcoin market started the week with a sharp decline due to new macroeconomic uncertainties in the U.S. Leading cryptocurrencies such as Ethereum, Solana, and XRP reversed last week’s upward trend.
Analysts Say Moody's US Move Is the Reason for the Fall in Altcoins
On May 16, New York-based credit rating agency Moody's downgraded the US government's credit rating from Aaa to Aa1. This means the US has lost its highest credit rating since 1949. Moody's decision was based on the country's increasing financial risks. Following the decision, US Treasury bonds reacted strongly; the 10-year bond yield rose to 4.5%, while the 30-year bond yield rose above 5%.
Valentin Fournier, chief analyst at BRN, noted that altcoins were volatile over the weekend following Moody’s downgrade. According to Fournier, the crypto market could trend sideways for a while in the current environment.
“Since there is no new macroeconomic catalyst before the core PCE data to be released on May 30, we expect an accumulation process and sideways movement in the market,” Fournier said, adding that the risk of a sharp decline in the short term is low. However, he added that a permanent increase will depend on new institutional demand or macro-level developments.
*This is not investment advice.
