# Expected scenario: rate hikes to 4.00%

This is the first decision by the new Fed Chair, Kevin Warsh, making it an extremely sensitive event for the following reasons:

1. Dot Plot (forecast matrix): It will reveal the intentions of FOMC members regarding the interest-rate path through the end of 2026 and 2027. If the matrix indicates a "hawkish" path (additional rate hikes), Bitcoin and alternative coins will face strong selling pressure.

2. Retail sales (+0.8% expected): If it comes in higher than expected, it will further boost the odds of more rate hikes, weighing on risk assets. If it’s weaker than expected, a short-lived Bitcoin rebound may occur.

3. Oil prices ($103/barrel): higher oil feeds inflation fears, pushing the Fed toward a more restrictive policy. That’s a headwind for crypto.

### Expected impact on crypto:

| Scenario | Probability | Impact on BTC |

|---|---|---|

| Raise + Hawkish Dot Plot | 60% | Pullback toward $73,000–$75,000 |

| Raise + Moderate Dot Plot | 30% | Volatility then stabilization around $76,000 |

| Keep rates unchanged (surprise) | 10% | Strong rebound toward $80,000+ |

## 📜 Analysis: CLARITY Act

### Current situation: “Heading toward disappointment”

- Procedural vote (Cloture) on Tuesday at 2:15 PM Eastern — needs 60 votes out of 100 to pass.

- The core point of contention isn’t the market structure itself, but the ethical language regarding officials holding digital assets.

- Polymarket odds fell from 34% to 17% overnight — the market is pricing in a likely failure.

### Why this matters for crypto?

1. If the vote fails (the most likely scenario):

- Short-term disappointment — could pull BTC down toward $74,000–$75,000

- But the impact may be temporary because the market has already priced in this scenario (odds have been cut in half)

- Reg (regulation)-linked alternative coins (XRP, SOL) may be hit harder

2. If the vote passes (positive surprise):

- Strong rebound — BTC toward $80,000–$82,000

- XRP and SOL could see the biggest rebound because they are most sensitive to regulation

- Opens the door for additional ETFs and institutional clarity

3. Long-term impact: Even if it fails today, the law will return in a session after the elections. The regulatory push toward clarity is clear—the only issue is timing.

## 📊 Current market situation

- BTC: ~$76,862 (-1.7%) — 6.6% below the month’s peak of $82,284

- ETH: ~$2,475 (-1.6%)

- SOL: ~$100 (-2%)

- XRP: ~$1.42 (down from $1.49 but on track to form a Golden Cross)

- More than 90 coins out of CoinDesk 100 are in the red today

### ⚠️ Compounding risks this week

Three pressure-inducing drivers meeting at the same time:

1. Hawkish Fed + high oil = pressure on risky assets

2. Regulatory failure = a bleed of confidence in crypto

3. Rising energy prices = inflation fears that support the dollar

This combination creates strong headwinds for crypto in the coming days. The next support for BTC is at $73,000–$74,000, and resistance is at $79,400.