Bitcoin pulling back after soaring over $106,000 over the weekend.

It's Monday, May 19th, 2025. I'm Christine Lee. This is Coin Nest Daily.

Bitcoin retreating Monday after spiking above $106,000, according to Coiness data, catching both bullish and bearish investors off guard.

More than 600 million in crypto positions were liquidated as a result of a short squeeze and subsequent aggressive profit taking.

A short squeeze happens when short sellers betting against a price are forced to buy the asset as it rises to cover their

losses, which pushes the price even higher and often very quickly. Nevertheless, Deribet Options

data shows a bullish bias with heavy concentration of call open interest at the 110, 115,

and 120,000 strike prices for May 30th. The volatility occurred amid macroeconomic uncertainty, including a U.S. credit rating downgrade

and inflation concerns.

Moody's cut the U.S. sovereign credit rating to AA1 from AAA, citing rising deficits,

interest expenses, and a lack of political will to rein in spending.

The firm now joins Fitch and S&P

in assigning a rating below the once-unblemished AAA status

long held by the world's largest economy.

Historically, concerns about U.S. debt,

sustainability, and dollar debasement

have served as tailwinds for Bitcoin

and other decentralized assets.

However, credit downgrades can also trigger short-term risk-off

behavior, particularly if macro uncertainty leads institutional traders to reduce exposure.

El Salvador and President Naibu Keli posting a screenshot of his country's Bitcoin portfolio

balance hitting over $644 million after Bitcoin touched $106,000. El Salvador has an unrealized profit of over $357 million

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