U.S. Treasury Secretary Janet Yellen recently reassured the public about the state of the U.S. economy, dismissing fears of a possible recession. Simultaneously, the crypto market has seen slight recoveries, with Bitcoin and Ethereum showing gains.
Statements by Janet Yellen
U.S. Treasury Secretary Janet Yellen recently stated that the U.S. economy is in good shape and there are no signs of an approaching recession.
Crypto Market Gains
Following these statements, the crypto market also showed signs of recovery. Bitcoin reclaimed the $54,000 mark, seeing a 0.6% gain. Ethereum rose by 1.3%, trading at $2,290. Leading the top-ten cryptocurrencies by market cap, Dogecoin saw a 2.6% increase.
Market Reactions
Yellen’s remarks have sparked various reactions within the crypto community. BitMEX co-founder, Arthur Hayes, noted that Yellen might resort to money printing to stimulate the economy, potentially leading to an increase in inflation and risk assets like cryptocurrencies. Despite these gains, Bitcoin’s price still shows signs of struggle. The Spent Output Profit Ratio (SOPR) remains below 1, indicating that average investors have been selling Bitcoin at a loss, suggesting bearish market sentiment. The Chaikin Money Flow (CMF) indicator shows low buying pressure, and the On Balance Volume (OBV) remains predominantly negative, indicating market weakness as selling volumes outweigh buying. 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 cautious as they await the release of the U.S. Consumer Price Index (CPI) data on September 11th. If the inflation forecast of 2.6% for August is met or falls below expectations, the crypto market could rebound. Conversely, if the data indicates a weakening U.S. economy, crypto prices could decline further.
In conclusion, Janet Yellen's statements on the U.S. economy have positively influenced the cryptocurrency market, but future developments will depend on external economic factors.
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