XRP, ETH and DOGE in red: Moody's hits the market with the U.S. credit downgrade.

Stocks also suffered a setback yesterday after it was revealed that Moody's downgraded the credit rating from Aaa to Aa1.

Major cryptocurrencies, such as ether (ETH), Ripple's XRP, and dogecoin (DOGE), experienced a drop of approximately 3% to 5% on Saturday, following Moody’s Ratings' decision to downgrade the sovereign credit rating of the United States from Aaa to Aa1.

The measure, which cites in a report published on May 16 the increase in deficits, rising interest expenses, and the lack of political will to control spending, had an immediate impact on traditional and cryptocurrency markets.

The document explains that for a decade "U.S. federal debt has increased sharply due to ongoing fiscal deficits," citing the pressure from higher interest rates.

"This downgrade of one notch on our 21-notch rating scale reflects the increase over more than a decade of public debt and interest payment ratios to levels significantly higher than those of sovereigns with similar ratings," it adds.

Ether, the cryptocurrency of Ethereum and the second by market capitalization, fell 5.80% in the last 24 hours, although its balance over the last 7 days remains positive, with nearly 2% appreciation in that period. Its price is at $2,450 at the time of writing.