Bitcoin Shows Resilience Post Moody's Credit Downgrade, Trading Near Key Levels

Bitcoin (BTC) demonstrates steady resilience despite Moody's recent downgrade of the U.S. credit rating. As of 8:10 a.m. on October 20, the cryptocurrency trades at 148.57 million won on South Korea's Upbit exchange, showing a 1.23% drop over the last 24 hours. On Binance, BTC slightly increased by 0.29%, priced at $105,630. Meanwhile, the CoinDesk 20 index, tracking 20 major cryptocurrencies, noted a 0.41% decline in the same period.

Ethereum (ETH) surged by 2.89%, in contrast to Solana (SOL) and XRP (XRP), which fell by 1.89% and 1.4%, respectively.

Liquidation Data Mirrors Market Trends

In the last 24 hours, Bitcoin liquidations reached approximately $114.55 million, with 53% of this attributed to short positions, as per on-chain data tracker CoinGlass. Across the broader cryptocurrency market, liquidations stood at $358.5 million, equivalent to around 498.3 billion won.

Market Rebounds Post Moody’s Downgrade

Bitcoin briefly dipped to $102,000 after Moody’s downgrade but quickly regained most losses. Analysts believe this rebound reflects the sentiment that Moody's action, coupled with rising U.S. bond yields, has limited long-term effects.

Ramu Ahluwalia, CEO of Lumida Wealth, stated, “Institutional investors may make short-term reallocations, but the long-term impact is unlikely to be significant.” Gong Dongrak, a researcher at Daishin Securities, added, "Moody’s downgrade was largely anticipated due to prior warnings, making its impact on U.S. Treasuries and financial markets limited."

Gong also noted that the recent volatility in U.S. bond yields comes from declining policy credibility post-tariff disputes during the Trump administration and increasing debt issuance. He said, “Given this context, Moody's downgrade is unlikely to further intensify bond market volatility.”

Moody’s cut the U.S. credit rating one notch to Aa1 while maintaining a “stable” outlook, indicating that further downgrades are unlikely.

U.S. Stock Markets Recover from Moody's Downgrade

U.S. equity markets rebounded from intraday losses to close higher. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 0.32% to 42,792.07, the S&P 500 gained 0.09% to 5,963.60, and the Nasdaq Composite finished up 0.02% at 19,215.46.

Analysts Predict More Upside for Bitcoin

Despite muted market reactions to Moody’s action, Bitcoin continues to attract interest due to fund inflows and supply-demand imbalances. Asset manager 21Shares forecasts Bitcoin reaching up to $138,500 by year-end. Matt Mena, a research strategist at 21Shares, said, “This growth is driven by institutional inflows, Bitcoin supply scarcity, and improving macroeconomic conditions, not speculative retail activity.”

He further commented, “The number of Bitcoin absorbed through spot ETFs surpasses the newly mined supply, intensifying scarcity. Additionally, corporations and even nations are adopting Bitcoin as a strategic reserve asset.”

Fear & Greed Index Indicates Stable Sentiment

On the sentiment front, the Alternative Fear & Greed Index for the cryptocurrency market steadied at 74 (Greed), unchanged from the previous day. The index measures investor sentiment, with a reading closer to 0 indicating strong selling pressure, while a score near 100 suggests heightened buying activity.