Cryptocurrencies Retreat as Fitch Downgrade Sparks Market Selloff

Cryptocurrencies Retreat Amidst Market Selloff Following Fitch Downgrade. Discover how cryptocurrencies, including Bitcoin, experienced a retreat amidst a wider market selloff following Fitch’s downgrade. Explore the potential technical levels for Bitcoin.

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On Thursday, cryptocurrencies, including Bitcoin, experienced a retreat as part of a wider selloff in risk-sensitive assets. The initial gains in crypto prices following Fitch’s downgrade of the U.S. credit rating were short-lived, as markets reacted negatively to the news.

Bitcoin’s Decline

Bitcoin’s price shed more than 1% over the past 24 hours, falling just above the $29,000 mark and moving further away from the critical range between $30,000 and $31,000 that had provided substantial support for the leading cryptocurrency in recent months.

Analysts, like Alex Kuptsikevich from broker FxPro, expressed concerns that Bitcoin might eventually accelerate its selloff, given the prevailing market conditions.

Fitch Downgrade and Crypto Bulls

On Wednesday, Bitcoin had briefly surged above $30,000 in response to Fitch’s downgrade of U.S. debt. Crypto bulls saw this move as a signal of deteriorating confidence in the traditional financial system and an opportunity for decentralized alternatives. However, the excitement was short-lived as Bitcoin’s price retraced.

The downward movement in digital assets mirrored the stock market’s slide, with the Dow Jones Industrial Average and S&P 500 experiencing significant declines on Wednesday and heading for further losses on Thursday as Treasury yields rose.

Key Technical Levels for Bitcoin

Bitcoin now hovers near its 50-day moving average, approximately $29,500, and is at risk of further declines. Katie Stockton, managing partner at technical research firm Fairlead Strategies, highlighted the next support levels for the token, with the rising 200-day moving average at $26,700 and long-term secondary support near $25,200.

Other Cryptocurrencies

Beyond Bitcoin, Ether—the second-largest cryptocurrency—also saw a decline of 1.5% to $1,830. Smaller altcoins were weaker, with Cardano crumbling 4% and Polygon slipping 2%. Memecoins followed a similar pattern, with Dogecoin down 4% and Shiba Inu shedding 2%.

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