Bitcoin Price Plunges as Clarity Act Stalls and Rate Hike Expectations Soar

The Bitcoin price continued to fall on September 16, reaching $75,800 after a 3.25% drop on Tuesday, according to TradingKey.

This decline reflects market caution ahead of the Federal Reserve's decision, expected on September 21, and further dampened risk appetite due to expectations of another rate hike.

The US Senate failed to advance the Digital Asset Market Clarity Act (CLARITY Act) on Tuesday, dealing a setback to plans for unified regulatory framework for the US digital asset market.

A 25-basis-point rate hike is widely expected by the market, with 85% of economists polled expecting a target range increase from 3.50%-3.75% to 3.75%-4.00%, and the probability of a rate hike soaring to 92.5%.

The upcoming Fed decision will be crucial in determining how the US dollar and Treasury yields affect Bitcoin's price, with higher risk-free yields potentially weighing on market risk appetite.