US credit rating downgrade, Bitcoin approaches historical high, altcoin market performs unexpectedly

Market Dynamics

Recently, Moody's Ratings Agency downgraded the United States' credit rating from Aaa to Aa1, becoming the last agency to lower the highest credit rating of the United States, following S&P and Fitch. This decision is mainly based on concerns about the continuously widening fiscal deficit. It is expected that by 2035, the federal deficit as a percentage of GDP will rise from 6.4% in 2024 to nearly 9%. Increased debt interest, rising welfare expenditures, and insufficient tax revenue have created a triple pressure.

The political deadlock has further exacerbated the fiscal predicament. The House Budget Committee failed to pass a $3.8 trillion tax reform proposal, while the budget draft indicates that most of the deficit increase over the next decade will come from extending existing tax policies. Bond yields are facing upward pressure, while the Bloomberg Dollar Index is nearing its April low, reflecting a weakening market confidence in the dollar.

Morgan Stanley predicts that the U.S. inflation rate will accelerate to an annual level of 3.0-3.5% in May, which may force the Federal Reserve to keep interest rates unchanged in 2025. Atlanta Federal Reserve President Bostic even expects that there will only be one rate cut this year, with economic growth possibly slowing to a range of 0.5-1%, creating a complex situation of low growth coexisting with high inflation.

In the cryptocurrency market, Bitcoin broke through $107,000 this morning, just 2.42% away from its historical high of $109,800. Several traders expect Bitcoin to set new highs in the near future. Analyst Alan predicts that Bitcoin will break its historical high in the coming days, with a target price of $116,000.

Investor Tim Draper continues to increase his holdings in Bitcoin, while renowned author Robert Kiyosaki predicts that Bitcoin will rise to $250,000 this year. Analyst Scott Melker points out that with the participation of traditional financial institutions, the Bitcoin market is becoming more mature and stable, with its volatility dropping from being three times that of the S&P 500 index to less than twice.

On the Ethereum side, its price has dropped below $2400 after breaking the $2700 mark, with over $200 million in long positions liquidated in the past 24 hours. However, technical analysis shows that Ethereum's price remains in a bullish formation, and if it breaks through the current resistance level, the target price could reach $3700. Analyst Titan of Crypto points out that the weekly stochastic relative strength index indicates that Ethereum still has upside potential.

In the secondary market, altcoins unexpectedly did not drop along with Ethereum. The market is still keen on trading several major Meme coins. Over the weekend, a new project on a certain platform had a return of about 50 times, with a current market value of approximately 11 million dollars. At the same time, another platform has seen a coin with the same concept as that of a certain platform, currently valued at about 3 million dollars.

In the past 24 hours, a Meme coin has triggered speculative sentiment due to a tweet from a certain tech entrepreneur, and it is viewed by some communities as a tool satirizing traditional value systems, with a current market cap of $2.2 million and a trading volume of nearly $20 million in the past 24 hours. Additionally, following the issuance of a token on a certain social platform, another instant messaging platform has also seen the phenomenon of token issuance, with one of the tokens currently having a market cap of $1.3 million.

Key Data

As of May 19, 12:00 HKT:

• Bitcoin: $103,600 (Year-to-Date +12.2%), Daily Spot Trading Volume $34.68 billion
• Ethereum: $2453 (Year-to-date -22.9%), Daily spot trading volume is $25.93 billion
• Fear and Greed Index: 74 (Greed)
• Average GAS: BTC: 1.07 sat/vB ETH: 0.95 Gwei
• Market share: BTC 63%, ETH 8.8%
• 24-hour BTC long/short ratio: 1.15
• Sector performance: Meme coins (some tokens down over 10%), SocialFi (-4.2%)
• 24-hour liquidation data: A total of 150,151 people worldwide were liquidated, with a total liquidation amount of 645 million USD, including 158 million USD in BTC liquidations, 245 million USD in ETH liquidations, and 19.1454 million USD in SOL liquidations.

ETF Flows

As of May 16:

• Bitcoin ETF: +260 million USD
• Ethereum ETF: +$22 million

Today's Outlook

• An AI project announced that it will launch a public testnet on May 19.
• The Bitcoin mining difficulty will be adjusted today at 22:01:56, expected to increase by 2.13% to 121.66T
• A certain online project will unlock 2.13 billion tokens on May 19 at 22:00, valued at approximately $325 million, accounting for 58.62% of the circulation.
• A certain Layer project will unlock 1.29 million tokens on May 20th at 3:00, worth approximately 1.84 million USD, accounting for 0.43% of the circulating supply.

Top 500 market cap biggest gains today: BUILDon (B) up 41.44%, PRO up 29.41%, KTA up 20.64%, ACT up 20.13%, STMX up 16.98%.

Hot News

• This week's macro outlook: The U.S. bids farewell to the top credit rating club, and the rebound of U.S. stocks may come to an end.
• This week's forecast: U.S. lawmakers will hold a final vote on the stablecoin bill; a certain political figure plans to attend a dinner on May 22.
• Data shows that multiple tokens will experience large unlocks, with one project unlocking a value of approximately $338 million.
• An institution has purchased an additional 1004 BTC, bringing the total holding to 7800 coins.
• A certain project created over 119,000 tokens, with a graduation rate of only 0.21%.
• A trader on a certain platform is heavily shorting mainstream coins like ETH and BTC, making profits of over 15 million dollars.
• A co-founder of a certain project was arrested in Moscow on suspicion of large-scale fraud.
• Trader James Wynn stated that if Bitcoin drops below 100,000 USD, he will increase his position, but he believes the likelihood of that happening is low.
• A renowned author predicts that Bitcoin will rise to $250,000 this year.
• The total revenue of a certain public chain's Q1 application reached $1.2 billion, marking the best quarter in a year.
• The Bitcoin mining difficulty increased by 2.13% at block height 897,120, reaching 121.66 T.
• The price of 1 Bitcoin is almost equivalent to 1 kilogram of gold.
• The U.S. Securities and Exchange Commission plans to review executive compensation disclosure rules