Today's market panic stems from Moody's downgrade of the U.S. sovereign credit rating!

The overall market decline today is attributed to Moody's downgrade of the U.S. sovereign credit rating!

Moody's officially announced on May 16, 2025 (local time Friday) that it has downgraded the U.S. sovereign credit rating from the highest level of Aaa to Aa1, and adjusted the outlook to 'stable'.

Bitcoin: After the announcement of the rating, the price quickly dropped from $104,000 to $102,600, a decline of about 1.3%.

Ethereum: Fell from $2,600 below $2,500, a decline of about 3.8%.

Other major cryptocurrencies: 19,721,243,424, 34,067,724,187, DOGE, etc., also declined simultaneously, with some cryptocurrencies dropping by as much as 3%.

The cryptocurrency market experienced significant fluctuations within 15 minutes after the rating announcement, proving that market participants are highly sensitive to this news.

You can take a look at the chart below; after Moody's announcement, the U.S. has now lost the AAA rating from all three major rating agencies (S&P in 2011, Fitch in 2023, Moody's in 2025), reflecting the growing global concerns over the sustainability of U.S. finances.

The impact of this rating downgrade on cryptocurrencies is weaker than the impact of Fitch's downgrade on the market in 2023; overall, Bitcoin has been less affected compared to the turmoil in financial markets previously!

Currently, market sentiment is poor, and with the weekend approaching, for conservative operations, it’s advisable to stay out of the market and observe the performance of U.S. stocks on Monday before taking further action!