I think this is one of those moments where the market can punish both bulls and bears.
Bitcoin is still hovering around the $75K area after the Senate failed to advance the CLARITY Act. The vote was 49-50, falling short of the 60 votes needed to move the bill forward. BTC then dropped toward $75K, while ETH and several major altcoins took a harder hit.
What interests me is that Bitcoin has not completely broken down despite losing one of the biggest regulatory catalysts the market had been pricing in.
Now the Fed takes over.
Markets have been pricing a 25 bp hike, which would take the policy range to 3.75%-4.00%. Inflation is still running above the Fed’s 2% target, while the 10-year Treasury yield has pushed above 5%. That combination is not exactly friendly for high-risk assets.
And this is why I’m not expecting the headline rate decision alone to tell us much.
The hike is already heavily expected. What I care about is what comes after it. Does Fed Chair Kevin Warsh signal another hike is possible? Does he leave the door open for a pause? What does the updated path for rates look like?
That reaction could matter more than the 25 bp itself.
There’s another interesting detail here. CoinMarketCap Research says Bitcoin’s short-term correlation with traditional markets has weakened sharply after the CLARITY shock, suggesting crypto is currently being driven more by crypto-specific catalysts than the usual macro playbook.
So I’m watching two things at the same time.
$75K is the line I don’t want Bitcoin to lose decisively. And the Fed’s language is the catalyst that could decide whether that level holds.
If BTC survives the CLARITY disappointment and the FOMC without losing $75K, I think the market is showing more underlying strength than the red candles suggest.
If $75K breaks cleanly, though, I’m not going to force a bullish narrative.
Let the chart prove it.