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Bitcoin (BTC) dipped by 3.2% yesterday, following news that a procedural vote on the Clarity Act in the U.S. Senate failed to meet the required threshold.
With 49 votes in favor, 11 less than the minimum established to move the bill to the main floor, the Clarity Act has now been shelved for what remains of the year.
Republicans made a few amendments to the bill in the past few days to entice Democrats, but apparently failed to ease their concerns regarding the ethical provisions they were demanding.
Most other cryptocurrencies experienced strong declines following the news, but seem to be starting to recover this morning.
Truth be told, the market had already priced in that the Clarity Act would not be passed this year. Odds in Polymarket have been collapsing for months, although they recovered to 30% last week ahead of this key vote.
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Price action aside, this is a major blow to the crypto industry’s push to get a clear legal framework that would allow them to launch and promote their ventures in the United States.
Nearly $600 million worth of long positions were liquidated yesterday as a result of this strong market-wide decline, with Ethereum (ETH) accounting for most of that total after a 5% drop.
Meanwhile, data from SoSoValue shows that $450 million was withdrawn from exchange-traded funds (ETFs) linked to Bitcoin, this being the largest single-day outflow since June 25.
Now thecrypto market is setting its eyes on today’s interest rate decision by the Federal Reserve. Although nearly 93% of the analysts surveyed by FedWatch expect a 25bps rate hike, they will dissect the words of the Fed’s new head, Kevin Warsh.
With inflation currently sitting at 3.4%, almost twice the Fed’s target, everyone is expecting a hawkish stance from the central bank for what remains of the year. The odds of another rate hike in December are currently exceeding the 70% threshold.
Hence, any hints that the Fed will adopt a dovish stance and delay the next rate hike for 2027 could have the most impact on Bitcoin’s short-term price action.
Apart from that, one typically expects a strong spike in volatility during the central bank’s presser that could retest key levels and unlock some trapped liquidity.
Every new Bitcoin analysis as it publishes, today’s technical signal and key levels, live price — on one page.
BTC Needs to Stay Above This Key Support to Avoid a Bigger Drop to $66K
Turning to the daily chart, BTC has invalidated a bullish flag pattern we had been tracking for weeks and could now be on track to retest the 200-day exponential moving average (EMA) from above.
This is the key support to watch in the near term, currently sitting at $73,000, as a significant volume of buy orders should be sitting there from late buyers who still want to get into this rally. If it holds, we could see the top crypto resuming its rally to $85K.
That said, if sellers overpower buyers at this price zone, that would indicate a strong shift in the overall narrative that will now favor bears.
We expect some sort of manipulation around that area if Bitcoin gets there, as market participants typically fool retail traders and get them to take the selling side of their buy orders.
That said, a confirmed breakout would mean that the market is broken once again due to the bearish nature of these two catalysts — higher rates and the Clarity Act vote — and that could put BTC on track to hit $66,000 within the next month or so.
Source: www.fxempire.com