Bitcoin Absorbs Fed Hike and Regulatory Setbacks

Bitcoin has shown resilience in the face of two negative events within a week. The Federal Reserve raised its federal funds target range by 25 basis points to 3.75%-4.00% on September 16, and the Senate rejected cloture on the motion to proceed with H.R. 3633, the Digital Asset Market Clarity Act, one day prior. According to BitGo Research, Bitcoin initially reacted to both events, moving toward $75,000 after the Fed's decision and then returning to roughly $76,000-$76,700 within hours.

However, instead of a lasting selloff, Bitcoin rebounded and climbed above $86,000 as demand returned. This price action strengthened the case for resilience in the face of negative events. The rebound occurred as U.S. spot Bitcoin ETFs moved from withdrawals back to inflows, with funds attracting approximately $159.5 million on September 17 and around $433 million the following day.

Nicolai Sondergaard, senior research analyst at Nansen, noted that the rally appeared to combine renewed ETF buying with forced short liquidations. However, he cautioned that exchange flows still showed Bitcoin moving onto trading platforms, leaving additional supply available for sale if momentum weakens.