ARBUS, ETH, BTC

Following S&P and Fitch, Moody's downgraded the US credit rating from Aaa to Aa1. The main concern stems from the continued expansion of the fiscal deficit

The U.S. bids farewell to the top credit rating club, and the U.S. stock market rebound may end

As expected, Moody's downgraded the U.S. credit rating from Aaa to Aa1, following S&P and Fitch. The main concern is the continued expansion of the fiscal deficit - the federal deficit as a percentage of GDP is expected to rise from 6.4% in 2024 to nearly 9% in 2035. The rising debt interest, increased welfare spending and insufficient tax revenue have formed a triple squeeze. The political deadlock has further exacerbated the fiscal dilemma. The House Budget Committee failed to pass Trump's tax reform plan with a cost of $3.8 trillion, and the draft budget shows that most of the increase in the deficit over the next decade will come from the extension of the Tax Cuts and Jobs Act.

The thinking of the rating agency is clear: the U.S. is sliding towards more debt and lower solvency, and it's time to downgrade. However, this move will likely have limited impact on markets in the short term. Firstly, the downgrade was widely anticipated and priced into the market. Since March, yields on U.S. Treasuries have risen sharply, especially on the long end. This indicates that market participants are already reacting to the deteriorating fiscal outlook and baking it into asset prices. Secondly, despite the downgrade, Moody's still expects the U.S. to fully repay its debt, which minimizes the solvency risk. Finally, the rating agency also highlighted the strengths of the U.S. economy, such as its diverse institutions, high productivity and flexible labor market.

In contrast to the bleak fiscal outlook, the U.S. economic data this week were mixed but largely better than expected. Consumer price index (CPI) inflation rose slightly less than expected in April, continuing the trend of sticky inflation. This may put pressure on the Federal Reserve to keep interest rates higher for longer. However, the University of Michigan's final May reading of the consumer sentiment index fell short of expectations, signaling that consumer confidence may be waning. This could pose a risk to future economic growth.

In the cryptocurrency market, Bitcoin broke through the $107,000 mark this morning, and it only needs to rise 2.42% further to reach its all-time high of $109,800. As such, many crypto traders are expecting Bitcoin to hit a new all-time high today.

According to American crypto analyst Alan, who is known for his bold predictions, Bitcoin is expected to break its all-time high in the next few days, with a target price of $116,000. He claims that the thinking of large institutions and hedge funds, which control a large portion of the market, will determine the direction of the market. Currently, these institutions are bullish on Bitcoin, and they are likely to drive its price up to reach new highs.

American billionaire investor Tim Draper continues to increase his holdings of Bitcoin. In a recent interview, Draper said that he prefers to invest in cryptocurrencies over the stock market because he believes in the future of blockchain technology. He predicts that Bitcoin's price will rise to $250,000 this year, and he is optimistic about the long-term value of cryptocurrencies.

Robert Kiyosaki, author of the bestseller "Rich Dad Poor Dad", also expressed his bullish view on Bitcoin. He predicts that Bitcoin will rise to $250,000 this year due to the failure of the U.S. dollar and the global economy. He advises people to sell their stocks and invest in cryptocurrencies, gold, and silver.

Crypto analyst Scott Melker believes that with the participation of traditional financial institutions such as pension funds and ETF issuers, the Bitcoin market is becoming more mature and stable. Its volatility has dropped from three times the S&P 500 index in the past to less than two times, making it less risky than investing in the stock market. He predicts that the current price of Bitcoin could rise another 2.5 times to reach $250,000.

As for Ethereum, its price fell back to below $2,400 after breaking through $2,700, and more than $200 million in long orders were liquidated in the past 24 hours. However, market technical analysis shows that Ethereum prices are still in a bullish flag pattern, and if it breaks through the current resistance level, the target price may point to $3,700. According to the weekly stochastic relative strength index, Ethereum still has the potential to rise further.

According to the analysis of Titan of Crypto, the stochastic relative strength index shows that although the price of Ethereum has dropped rapidly this week, it is