US credit rating downgraded, Bitcoin approaching historical highs, altcoin market surprisingly resilient

Market Observation

Moody's has downgraded the US credit rating from Aaa to Aa1, primarily due to the ongoing widening 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 revenues create a triple pressure. Political gridlock has exacerbated this dilemma, as the House Budget Committee failed to pass a $3.8 trillion tax reform plan.

The upward pressure on bond yields is in contradiction with the US dollar index nearing its April low. Market confidence in the dollar is weakening, while some analysts predict that US inflation will accelerate to 3.0-3.5% for the year by May. This may compel the Federal Reserve to keep interest rates unchanged in 2025. There are expectations that there may be only one rate cut this year, and economic growth may slow to a range of 0.5-1%, resulting in a situation of low growth coupled with high inflation.

The price of Bitcoin has surpassed $107,000, just 2.42% away from its historical high of $109,800. Multiple traders expect Bitcoin to reach new highs, with some analysts predicting a target price of $116,000. Some investors and analysts are even more optimistic, forecasting that Bitcoin could rise to $250,000 this year. With traditional financial institutions getting involved, the volatility of the Bitcoin market has decreased from being three times that of the S&P 500 in the past to less than twice that now.

The price of Ethereum fell below $2400 after breaking through $2700, with over $200 million in long positions liquidated within 24 hours. However, technical analysis indicates that Ethereum is still in a bullish pattern, and 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, and it could even reach $4000 to $5000.

In the secondary market, altcoins have shown unexpected resilience, not following the decline of Ethereum. The market remains keen on trading some major Meme coins. Over the weekend, a new project on a certain platform yielded about 50 times the investment, with a current market capitalization of approximately $11 million. At the same time, another platform has introduced a coin with a concept similar to a certain project, currently valued at around $3 million. In the past 24 hours, a Meme coin has triggered speculative sentiment due to a tweet from a well-known entrepreneur, which has been seen by some in the community as a tool to satirize the traditional value system, reaching a market cap of $2.2 million and a daily trading volume of nearly $20 million. Furthermore, following the issuance of coins on a certain social platform, another instant messaging platform has also witnessed the phenomenon of coin issuance, with one project currently valued at $1.3 million.

Key Data

• Bitcoin: $103,600 (Year-to-date +12.2%), daily trading volume $34.68 billion
• Ethereum: $2453 (Year-to-date -22.9%), Daily trading volume $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 down over 10%), SocialFi (-4.2%)
• 24-hour liquidation data: A total of 150,151 people globally were liquidated, with a total amount of 645 million dollars.
• BTC medium to long-term trend channel: upper edge 103016.97 USD, lower edge 100977.03 USD
• ETH medium to long-term trend channel: upper edge $2389.95, lower edge $2342.62

ETF Flows

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

Today's Outlook

• A certain AI project will launch a public testnet.
• Bitcoin mining difficulty is expected to increase by 2.13% to 121.66T
• A certain network project will unlock 2.13 billion tokens, worth approximately $325 million.
• Another project will unlock 1.29 million coins, worth approximately 1.84 million USD.

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

Hot News

• The US bids farewell to the top credit rating club, and the rebound in US stocks may be coming to an end.
• American lawmakers will hold a final vote on the stablecoin bill.
• Multiple token projects are about to face large unlocks.
• A certain investment institution has purchased an additional 1004 BTC, bringing the total holdings to 7800 coins.
• The number of tokens created by a certain project exceeds 119,000, but the graduation rate is only 0.21%.
• A trader is heavily shorting mainstream coins like ETH and BTC, making a profit of over 15 million dollars.
• A co-founder of a certain project was arrested in Moscow on suspicion of large-scale fraud.
• A well-known author predicts that Bitcoin will rise to $250,000 this year.
• The total revenue of a certain public chain's Q1 applications reached $1.2 billion, setting the best quarterly performance in a year.
• Bitcoin mining difficulty increased by 2.13%, 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.