Key Points
- US Treasury Secretary Janet Yellen confirms the health of the US economy, dismissing recession fears.
- Bitcoin and Ethereum see slight gains, while Dogecoin leads with a 2.6% increase.
US Treasury Secretary, Janet Yellen, recently reassured the public about the state of the US economy. She dismissed any signs of a possible recession.
Simultaneously, the crypto market has seen a slight recovery. Bitcoin has reclaimed the $54,000 mark.
Crypto Market Gains
All top-ten cryptocurrencies were trading in green at the time of the report. However, they did not reach their weekly highs.
Bitcoin saw a minor 0.6% gain, bringing it back above $54,000. Ethereum followed with a 1.3% increase, trading at $2,290. Dogecoin led the top ten largest cryptos by market cap with a 2.6% gain.
This rebound occurred after Yellen’s comments regarding the health of the US economy.
Market Reactions
Yellen’s remarks have sparked various reactions within the crypto community. BitMEX co-founder, Arthur Hayes, suggested that Yellen might resort to money printing to stimulate the economy. This could potentially lead people to risk assets like crypto due to increased inflation risk.
Despite these gains, Bitcoin’s price still shows signs of struggle. The Bitcoin Spent Output Profit Ratio (SOPR) has remained below 1 since the beginning of the month, indicating that average investors have been selling Bitcoin at a loss. This suggests a bearish sentiment and market distress.
The Chaikin Money Flow (CMF) indicator also shows low buying pressure. The On Balance Volume (OBV) remains predominantly negative, indicating market weakness as selling volumes dominate.
However, Bitcoin may have formed an ideal entry point after testing the support at $53,469. The last time Bitcoin tested this support, it registered an 8% gain.
Buyers may remain hesitant as they await the release of the US Consumer Price Index (CPI) data on 11th September. If the inflation forecast of 2.6% for August is met or falls below expectations, the crypto market could rebound. Conversely, if the data suggests a weakening US economy, crypto prices could fall further.
