- US Treasury Secretary Janet Yellen said the US economy was healthy and there were no signs of a recession.
- The cryptocurrency market recovered slightly, with Bitcoin recovering to $54,000.
The cryptocurrency market saw slight gains, with the top ten cryptocurrencies trading in the green at press time, although they failed to reach their weekly highs.
Bitcoin (BTC) rebounded above $54,000 after a slight gain of 0.6% in 24 hours. Ethereum (ETH) followed suit, gaining 1.3% to trade at $2,290 at the time of writing.
The main winner among the ten largest cryptocurrencies by market capitalization is Dogecoin (DOGE) with a gain of 2.6%.
The recent rebound comes after U.S. Treasury Secretary Janet Yellen said The U.S. economy was healthy and “deeply engaged in recovery.”
Yellen spoke at the Texas Tribune Festival on Saturday, where she raised concerns about weak jobs report released last week after nonfarm payrolls figures fell below expectations.
Yellen said she did not see any “red lights flashing” and that the jobs data was a sign of a soft landing, not a recession.
Her comments sparked reactions within the crypto community. According to BitMEX co-founder Arthur Hayes, Janet Yellen will likely resort to money printing to stimulate the economy.
“Bad Girl Yellen is watching, if the markets go down further she will definitely pump up the pressure by printing more money,” Hayes said.
Such activity could prompt people to move into risky assets like cryptocurrencies, as money printing increases the risk of inflation.
Bitcoin is not out of the woods yet
Despite recent gains, BTC price is still showing signs of trouble. Since the beginning of the month, Bitcoin’s profit-to-production ratio (SOPR) has failed to rise above 1.
Source: CryptoQuant
This metric shows that the average investor has sold BTC at a loss over the past week. Such loss-taking activity indicates bearish sentiment and market distress as investors panic and cut their losses.
Buying pressure also remains weak, as shown by the Chaikin Money Flow (CMF) indicator, which was negative at press time. This index continues to create lower lows and is currently at its lowest level since June on the four-hour chart.
Source: Tradingview
The prevailing bearish sentiment has also manifested itself in the on-balance volume (OBV), which remains mostly negative. This trend shows the weakness in the market, as selling volumes dominate, putting downward pressure on BTC prices.
Nevertheless, BTC may have formed an ideal entry point after testing the support at $53,469. The last time BTC tested this support, it saw an 8% gain.
It is important to note that buyers may remain hesitant pending the release of the US Consumer Price Index (CPI) data on September 11.
The market forecast August inflation is 2.6%. If the CPI falls below or below expectations, the cryptocurrency market could rebound. Conversely, if the data still shows a weakening US economy, cryptocurrency prices could fall further.
