The downgrade of the US credit rating has triggered fluctuations in the financial market, and Bitcoin is expected to reach a historic high.

Market Observation

Moody's has downgraded the United States' credit rating from Aaa to Aa1, becoming the last major rating agency to downgrade the U.S. rating after S&P and Fitch. This decision is primarily based on concerns over the continuously expanding fiscal deficit. The federal deficit is expected to rise from 6.4% of GDP in 2024 to nearly 9% by 2035. Rising debt interest, increasing welfare spending, and insufficient tax revenue have created a triple pressure.

The political deadlock has exacerbated the fiscal crisis. The House Budget Committee failed to pass a $3.8 trillion tax reform package, while the budget proposal indicates that most of the increase in the deficit 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 lows, reflecting a weakening market confidence in the dollar.

Morgan Stanley predicts that the U.S. inflation rate will accelerate to an annual rate of 3.0-3.5% in May, which may force the central bank to keep interest rates unchanged in 2025. A certain Federal Reserve chairman even expects only one rate cut this year, with economic growth potentially slowing to a range of 0.5-1%, creating a complex situation of low growth and high inflation coexisting.

In terms of the cryptocurrency market, Bitcoin broke through $107,000 this morning, needing only a 2.42% increase to reach its historic high of $109,800. Multiple traders expect Bitcoin to set a new historical high. One analyst predicts that Bitcoin will break its historical high in the coming days, with a target price of $116,000. A certain American billionaire investor continues to increase his holdings in Bitcoin, while a well-known author predicts that Bitcoin will rise to $250,000 this year.

Another cryptocurrency analyst believes that the Bitcoin market is becoming more mature and stable with the participation of traditional financial institutions such as pension funds and ETF issuers. Its fluctuation has decreased from being three times that of the S&P 500 index in the past to less than twice, making it not impossible for the current price of Bitcoin to rise 2.5 times to $250,000.

The price of Ethereum fell below $2400 after breaking through $2700, with over $200 million in long positions liquidated in the past 24 hours. However, market technical analysis indicates that the price of Ethereum is still in a bullish pattern. If it breaks through the current resistance level, the target price could point to $3700. Some analysts believe that Ethereum may rise again to the range of $3000 to $3300 after retracing to $2400, and some even predict that if the price drops to $1800 and finds support, it may trigger a new round of upward movement, with target prices between $4000 and $5000.

In the secondary market, altcoins unexpectedly did not decline along with Ethereum, and the market remains keen on trading several major Meme coins. A recent new project on a certain platform yielded about 50 times returns, with a current market value of approximately 11 million dollars. Meanwhile, a new conceptual coin has emerged on another platform, currently valued at around 3 million dollars. In the past 24 hours, a Meme coin named Time triggered speculative sentiment due to comments made by a tech entrepreneur stating "time is the ultimate currency," and is seen by some communities as a tool to satirize the traditional value system, with a current market value of 2.2 million dollars and a trading volume of nearly 20 million dollars in the past 24 hours. Furthermore, following the issuance of coins on a certain social platform, another instant messaging platform has also seen coin issuance phenomena, with one project currently valued at 1.3 million dollars.

Key Data

• 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 fluctuations: Meme coins (the two main representative coins fell by over 10%), SocialFi (-4.2%)
• 24-hour liquidation data: A total of 150,151 people were liquidated globally, with a total liquidation amount of $645 million, including $158 million in BTC liquidations, $245 million in ETH liquidations, and $19.1454 million in SOL liquidations.

ETF Flow (as of May 16)

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

Today's Outlook

• A certain AI project announced that it will launch a public testnet on May 19.
• The Bitcoin mining difficulty was adjusted at block height 897120 (Beijing time today at 22:01:56), with a 2.13% increase to 121.66T.
• A certain network project will unlock 2.13 billion coins on May 19 at 22:00, worth approximately 325 million dollars, accounting for 58.62% of the circulation.
• A certain Layer2 project will unlock 1.29 million tokens on May 20 at 3:00, valued at approximately 1.84 million USD, accounting for 0.43% of the circulating supply.

Top 500 market cap 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 US bids farewell to the top credit rating club, and the rebound in US stocks may come to an end.
• This week's forecast | US lawmakers will hold a final vote on the stablecoin bill; a certain politician plans to attend a banquet on May 22.
• Data: Multiple token projects will see large unlocks, with one project unlocking a value of approximately $338 million.
• A cryptocurrency investment company has acquired an additional 1004 BTC, bringing its total holdings to 7800 coins.
• A certain DEX project created over 119,000 coins, with a graduation rate of only 0.21%.
• A trader from a certain trading platform, who earned over $15 million, is making large short positions on mainstream coins like ETH and BTC.
• A co-founder of a certain project was arrested in Moscow on suspicion of large-scale fraud.
• Trader James Wynn: If Bitcoin falls below $100,000, he will increase his position, but the likelihood is low.
• A well-known author: It is expected that Bitcoin will rise to 250,000 USD this year.
• The total revenue of a certain public chain in Q1 reached $1.2 billion, marking the best quarter in a year, with one project leading at $257 million.
• 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 SEC plans to review executive compensation disclosure rules.