Bitcoin Rebounds Above $81,000 After Digesting Headwinds

Bitcoin (BTC) rebounded rapidly from its drop to around $75,500 after two major headwinds, the stall of the U.S. crypto bill and the Federal Reserve's rate hike, materialized in succession.

The CLARITY Act, aimed at clarifying regulatory authorities over digital assets, failed to advance with only 50 votes in favor on September 15. The bill's failure sent Bitcoin and crypto-related stocks down temporarily, but the market didn't enter a complete downturn as the SEC and CFTC continued pushing forward rulemaking related to digital assets.

The second turning point came from the Federal Reserve's rate hike decision on September 20. Although it signaled room for further hikes in the future, the market avoided a fresh round of significant tightening shocks after macro pressures eased.

Renewed inflows into spot Bitcoin ETFs became a capital catalyst for this rebound. U.S. spot Bitcoin ETFs recorded net outflows of approximately $450 million and $296 million on September 15 and 16 respectively, but flows reversed to a net inflow of $160 million on September 17.

However, macro pressures have not entirely dissipated as the Fed still signals the possibility of another rate hike this year. Elevated U.S. Treasury yields also mean that Bitcoin must contend with a high risk-free rate environment.