The week started with a sharp decline in altcoins amidst new macroeconomic uncertainties in the US. Leading cryptocurrencies such as Ethereum, Solana, and XRP reversed last week's upward trend.
Altcoin Market Decline
Altcoins have started the week with a sharp decline, impacting cryptocurrencies like Ethereum, Solana, and XRP. This decline followed a rise observed the previous week, marking an unexpected turn for investors.
Reaction to Credit Rating Downgrade
On May 16, Moody's downgraded the US government's credit rating from Aaa to Aa1, marking the loss of its highest credit rating since 1949. The decision was made based on increasing financial risks in the country. As a result, US Treasury bonds reacted strongly, with the 10-year bond yield rising to 4.5%, while the 30-year bond yield climbed above 5%.
Market Prospects Amid Uncertainty
Analyst Valentin Fournier from 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. However, he added that the risk of a sharp decline in the short term is low.
The current market situation analysis for altcoins indicates that macroeconomic factors such as changes in credit rating can exert significant pressure on investment strategies and overall market dynamics.
