XRP is Facing 50% Crash Risks Due To Moody’s US Govt Downgrade

XRP (XRP) and the broader crypto market have started their new weekly session in the red, reflecting declines in US stock markets following Moody’s downgrade of the US sovereign credit rating.

Moody’s Shocker Sends XRP, Crypto Crashing

On May 16, Moody’s lowered the US credit rating from Aaa to Aa1, citing concerns over rising federal debt and increasing interest payments. The decision marked the loss of the last top-tier credit rating from the major agencies, as both S&P and Fitch had previously downgraded the US in 2011 and 2023, respectively.

The downgrade triggered a risk-off sentiment across global markets. US stock futures declined, with the S&P 500 futures down 0.97%, Nasdaq 100 futures dropping 1.19%, and Dow futures sliding 0.79%.

Cryptocurrencies also experienced declines; XRP, along with Ether and Dogecoin, fell approximately 3% following the announcement. That is akin to the market’s response to a period of economic turbulence earlier this year, caused by Donald Trump’s erratic tariff policies.

XRP is Entering Final Leg of 50% Crash Setup

XRP’s weekly chart reveals a cup-and-handle formation — typically a bullish continuation pattern — but the current setup is turning precarious. Price has failed to break out above the $3.00 rim and is now forming a weak handle, drifting back toward key support near $2.00.

If XRP breaks below this horizontal support, the entire pattern risks invalidation. The measured move from the cup’s base ($1.15) to the rim ($3.00) suggests that a breakdown could reverse the prior gains, targeting $1.15, a potential 50% drop from current levels.

The RSI is weakening, and volume is declining during the handle phase, which are both signs of fading bullish momentum. Combined with macroeconomic pressure from the US credit rating downgrade and rising global tariffs, XRP is vulnerable to a deeper retracement if support fails to hold.