Bitcoin ignores Moody’s US debt downgrade, rallies back to $105K after profit-taking sell-off
Bitcoin (BTC) experienced a 4% price correction on May 19, dropping from just below $106,600, a significant level where 31,000 BTC are held. This decline was influenced by macroeconomic factors, including Moody’s downgrade of the US credit rating from Aaa to Aa1, citing concerns over a $36 trillion debt and rising federal deficits. The downgrade led to increased US Treasury yields, with the 10-year yield reaching 5.53%. Historical responses to downgrades have varied, but current trends indicate rising yields amid inflation fears, impacting Bitcoin's price as investors seek safer assets. Despite short-term pressures, market sentiment shows cautiousness among traders betting against Bitcoin, suggesting a potentially bullish long-term outlook. A weakening US Dollar Index may further support Bitcoin's position as a "digital gold" alternative.
