Bitcoin Surrendered a Weekend Burst Above $107,000 and Was Last Changing Hands Near $103,200

Bitcoin's Violent Swing Explained. The volatility landed on the heels of Moody's decision to cut the sovereign credit rating of the United States to Aa1

Bitcoin price tumbled more than 4,000 on Monday, wiping out a weekend burst above $107,000 as the global risk-off mood deepened with Moody’s downgrade of the US credit rating.

Bitcoin’s Violent Swing Explained

The flagship cryptocurrency was last changing hands at around $103,200, having hit an intraday high of $107,111 during thin Asian hours before liquidity evaporated and spot markets on Binance and Coinbase slid to the $102,000 level.

The volatility landed on the heels of Moody’s decision late Friday to cut the sovereign credit rating of the United States to Aa1, stripping the world’s largest economy of the last triple-A crown it still retained after downgrades by S&P in 2011 and Fitch earlier in 2023.

Moody’s cited an “uninterrupted rise in debt and interest costs” as the main driver for the downgrade, which came after the US Treasury posted record outlays for 30-year bonds last week to meet bids and push yields over the 5% level for the first time since April.

Treasury Secretary Scott Bessent dismissed the ratings move in a televised interview on Sunday.

“Moody’s is a lagging indicator. We didn’t get here in the past 100 days. We inherited a 6.7 percent deficit-to-GDP, the highest ever outside a recession or war,” said Bessent, adding that the Biden administration was determined to bring spending down and grow the economy.

While macro anxiety explains most of the Bitcoin pull-back, derivatives positioning amplified the swing. Coinglass data shows more than $665 million worth of leveraged positions were liquidated on the entire crypto market as perpetual funding flipped sharply positive into the spike and then reversed.

Dealers long gamma seized the opportunity to lock in profits, Singapore-based QCP Capital said in its Monday note.

The weekend pop owed much to Metaplanet’s $104 million BTC purchase, alongside Strategy Inc.’s usual accumulation, QCP added.

But Bitcoin’s ability to rally while equities softened reinforces BTC’s positioning as a legitimate store of value, the fund managers noted.

Flows into the ten US spot-Bitcoin exchange-traded funds underline that narrative.

As of 29 April, the latest consolidated figure, the ETFs had drawn a cumulative 38.99 billion of net subscriptions and hold roughly 1.14 million BTC after another $591 million day of inflows, according to Farside Investors data.

Technical traders are divided on what comes next for Bitcoin.

Piranha Profits founder Adam Khoo reminded his 450,000 followers on X that previous US downgrades triggered 10% corrections in the S&P 500 but were fully erased within a year.

“If the SPX drops another 10 percent this round, it would be another great opportunity for me to load up on high-quality businesses,” he wrote, musing whether markets will panic a third time or be smarter now.

For Bitcoin, the picture is less binary. On-chain data show exchange balances at multi-year lows, and options desks report persistent call-side skew - evidence, QCP says, of structurally bullish positioning despite the whipsaw.

But traders are watching the $101,000-$100,000 band for first-line support, with a decisive break lower exposing the 50-day exponential moving average around $98,400. Reclaiming $107,000 would reopen January’s record high at $109,114.

Until then, the asset appears content to digest the Moody’s shock - and to let macro traders, not crypto die-hards, set the tempo of the next move.