Moody’s Investors Service has downgraded the US for the first time in history, citing unsustainable federal debt and rising interest payments. The news sent shockwaves through global markets, and cryptos lost over $100 billion in combined value.

Bitcoin (BTC) is stuck at $103,500, while altcoins like Ethereum (ETH), Solana (SOL), Ripple (XRP), and Dogecoin (DOGE) each fell 2%. Analysts say the downgrade has increased investor anxiety, causing a temporary retreat from volatile assets like cryptos.

Economists are sounding the alarm as US federal interest payments are projected to consume 30% of government revenue by 2035, up from 9% in 2021. The debt-to-GDP ratio is also expected to balloon to 134% by 2035, a fiscal tipping point.

Stablecoins Signal Caution

Despite market volatility, stablecoin reserves on Binance are stuck in a range of $30–$34 billion, according to analyst Ali Martinez. This lack of movement means investors are not rotating into riskier crypto assets.

Key points from the stablecoin market:

• Stablecoin supply unchanged: Reserves stuck between $30B–$34B

• Investor behavior: Holding, not deploying

• Market sentiment: Risk off amid macro uncertainty

The stagnation shows even experienced traders are stepping back, waiting for more regulatory clarity or macro stability before getting back in.

And the GENIUS Act cloture vote is coming up, a bill to regulate stablecoins. Industry leaders like Coinbase CEO Brian Armstrong are lobbying for its passage, saying a strong regulatory framework will bring in new capital and reduce uncertainty.

BTC & ETH At Critical Levels

Bitcoin and Ethereum are both testing levels. BTC is sideways at $103,500. According to Martinez, Bitcoin’s support is at $98,131, resistance at $116,900.

Ethereum has fallen below $2,500 after failing to break $2,700. Crypto Patel says ETH could go into the $1,930–$2,100 zone before bouncing back.Then $4,000–$5,000.