- US Treasury Secretary Janet Yellen has said the US economy is healthy and there are no signs of a recession.
- The crypto market has recovered somewhat, with Bitcoin recovering $54,000.
The crypto market has made slight gains, with all top ten cryptos trading in the green at the time of writing, although not reaching their weekly highs.
Bitcoin [BTC] has risen above $54,000 again after a slight gain of 0.6% in 24 hours. Ethereum [ETH] has followed suit, gaining 1.3% to trade at $2,290 at the time of writing.
The biggest winner in the top ten largest cryptos by market capitalization is Dogecoin [DOGE] with a gain of 2.6%.
The recent recovery comes after US Treasury Secretary Janet Yellen said the US economy was healthy and ‘deeply in recovery’.
Yellen spoke at the Texas Tribune Festival on Saturday, where she expressed concerns about the vulnerable jobs report was released last week after nonfarm payrolls came in below expectations.
Yellen said she saw no “red lights flashing” and that the jobs numbers were a sign of a soft landing, not a recession.
Her comments have sparked reactions from the crypto community. According to BitMEX co-founder Arthur Hayes, Yellen will likely resort to printing money to stimulate the economy.
“Bad Gurl Yellen is watching: If the markets fall further, she will surely add to the problems by printing more money,” says Hayes. declared.
Such activities could cause people to turn to risky assets like crypto, as money printing increases inflation risk.
Bitcoin is not out of the woods yet
Despite the recent gains, the BTC price is still showing signs of trouble. Since the beginning of the month, the Bitcoin Spent Output Profit Ratio (SOPR) has failed to rise above 1.
Source: CryptoQuant
This metric shows that the average investor sold BTC at a loss over the past week. Such loss-making activity signals bearish sentiment and market trouble, as investors panic and cut their losses.
Buying pressure also remains low, as evidenced by the Chaikin Money Flow (CMF) indicator, which was negative at the time of writing. 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 was also visible in On Balance Volume (OBV), which remains predominantly negative. This trend shows market weakness as sales volumes dominate and put downward pressure on BTC prices.
Nevertheless, BTC could have been an ideal entry point after testing the support at $53,469. The last time BTC tested this support, it registered an 8% gain.
It is crucial to note that buyers may remain cautious ahead of the release of the US Consumer Price Index (CPI) on September 11.
The market prediction for August inflation is 2.6%. If the CPI falls within or below expectations, the crypto market may recover. Conversely, if data continues to show a weakening US economy, crypto prices could fall further.