BTC MVRV Ratio Nears Historical Lows; Yellen Softens Stance on Crypto

Chart of the Day





On Thursday, the broader crypto market continued its stagnation as investors look to catch their breaths after having pulled out a knee-jerk reaction to the U.S. Federal Reserve's hawkish stance (with regard to combating inflation) just a day before. As of the time of writing, BTC is consolidating above the $43k handle after experiencing some marginal gains over the last 24 hours. A bearish trendline with its upper bound near the $43.8k level is also forming on BTC's hourly chart, where a clear breakout above said resistance level would likely fuel the largest cryptocurrency by market cap to accelerate its upside gains. On the on-chain front, BTC's Market Value to Realized Value (MVRV) ratio has been hovering near historical lows, suggesting that there is room for BTC's "fair value" to increase. Meanwhile, the Stablecoin Supply Ratio (SSR) still has a long way to go if it wants to get back to previous highs. For some context, it can be understood that capital is flowing from stablecoins into BTC if the SSR trends upwards. 

Moving away from BTC, ETH seems to be faring slightly better as the number two cryptocurrency by market cap has managed to climb back to the $3,260 level after posting up a 2% gain from 24 hours ago. Most major altcoins have also largely flipped green, with NEAR leading this altcoin rallying charge on the back of an impressive 20% gain within the last couple of hours. 





Talk of the Town





Janet Yellen, the U.S. Treasury Secretary, delivered her first major speech on Thursday discussing the potential risks and benefits that the burgeoning cryptocurrency economy will bring to the world at large. The contents of her speech were very much aligned with a recent White House executive order, and revolve around the argument that crypto asset regulations should support responsible innovation whilst still managing and mitigating the risks (on consumers and the broader financial system) that will likely come with such an ecosystem. Yellen also expressed hope that the digital asset sector will bring about more innovation to the existing payments industry, one that she sees as "too slow, costly, and not sufficiently inclusive". However, she maintained a cautious attitude with regard to stablecoins in her speech, and also hinted at the possibility of a U.S. central bank digital currency (CBDC).