The recently released statements of Janet Yellen regarding a possible rise in the US interest rates gave rise to a quick panic episode which led to the fall in stocks and Bitcoin. A comprehensive panic episode after the statement by Janet caused the markets to close the day with red candles all over the place.
The US Treasury Secretary, Janet Yellen on the Potential Rise in Interest Rates
Janet Yellen gave signals in a video conference that the administration of Joe Biden may be targeting to raise the interest rates as a way to save the economy after the imbalance caused by measures to battle the COVID-19 pandemic.
Discussing further the actions that would be on the table to invigorate the economy in the aftermath of the crisis, Janet gave an explanation that they were considering reallocating some investments and altering some of their policies.
However, she was vehement in pointing out that any alteration would be modest and said:
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overeat, even though the additional spending is relatively small relative to the size of the economy. So it could cause some very modest increases and interest rates to get that reallocation. But these are investments our economy needs to be competitive and productive.”
Bitcoin and Stocks Dump After Janet’s Statement
Well, a not-so-good reaction was witnessed after the release of the statement of Janet, the crypto industry fell from $2.3 trillion to $2.1 trillion in a matter of two hours. However, after a slight recovery, the market is placed in the zone of $2.2 trillion.
Bitcoin dropped back from the level of $55K and lost around $3.5K in just 6 hours, putting it below the 50-period EMA once again which could signal but fatigue and canceling out the gains of the past 5 days.