Bitcoin is trading near $75,500 as markets brace for Wednesday's Federal Reserve decision, but the cryptocurrency has already lost two pillars that bulls hoped would drive a rebound above $80,000. The Senate's failure to advance the CLARITY Act and a nearly fully priced-in quarter-point rate hike have shifted the focus to a critical support level.
The digital asset briefly dipped below $75,000 on Tuesday after the Senate voted 49-50 against moving the CLARITY Act forward, falling short of the 60 votes needed. The bill aimed to establish a U.S. framework for digital assets and clarify the roles of the SEC and CFTC. Bitcoin dropped to around $74,888, about 4.3% below its earlier high, as expectations for the vote deteriorated.
Tim Enneking, managing partner at Psalion, told Forbes that the decline was "due directly" to pushback over the legislation. While the bill is stalled rather than dead—Senator Thom Tillis preserved a procedural path for reconsideration—traders have lost a regulatory catalyst. That leaves macroeconomic conditions carrying more weight into the Fed's decision.
Bitcoin's late-August recovery was fueled by softer Treasury yields and improving risk appetite. That backdrop has reversed as persistent inflation and expensive oil pushed the 10-year Treasury yield above 5% this week. Markets now assign a 90% probability to a quarter-point Fed increase, meaning the move itself should contain little surprise if policymakers deliver as expected.
Independent financial researcher Joseph Edwards told Reuters that a hike "would likely put a damper on the recent rally." More important is what Chair Kevin Warsh says afterward. A signal that September begins a broader tightening cycle would reinforce competition from yielding assets and keep liquidity restrictive. Morgan Stanley now expects another quarter-point increase in December. Conversely, presenting Wednesday's move as a limited recalibration could remove some uncertainty.
Wintermute OTC trader Jasper De Maere identified $75,000 and $82,000 as the key levels heading into the FOMC meeting, telling CoinDesk that the market was increasingly "trading rates rather than anything crypto-specific." Bitcoin has now tested that lower boundary. A sustained defense would show buyers are willing to absorb a failed legislative vote, yields around 5%, and another expected rate increase without allowing the late-summer recovery to unravel.
The drop also flushed leverage from the market. More than $98 million of long positions were liquidated during Tuesday's selloff, potentially reducing one source of forced selling. Below $75,000, traders would have to determine whether the move represents a brief liquidity sweep or deeper breakdown. Wintermute's earlier framework placed the next important downside area around $72,000, while $82,000 remains key upper resistance.
That makes Wednesday less about the first Fed reaction and more about whether real demand appears around $75,000. As the market digests these developments, investors are also watching other sectors. For instance, Bitget's move into stock options highlights the evolving crypto landscape, while Marvell's AI-driven surge shows how tech stocks are navigating similar macro headwinds.
This article is for informational purposes only and does not constitute financial advice.
