Bitcoin Reclaims $86,000 Despite Rate Hike and Clarity Act Setback

Bitcoin has managed to reclaim the $86,000 mark despite two significant bearish catalysts - the Federal Reserve's interest rate hike and the Senate's failure to pass the CLARITY Act. According to a BitGo Research report, BTC absorbed these developments with ease, making it an outlier compared to traditional assets like gold and equities.

The report cites that Bitcoin's price action was affected by ETF demand and short covering, which helped support the rally. Greg Cipolaro from BitGo stated that the flagship cryptocurrency's muted reaction to the rate hike and CLARITY Act setback likely means the price action had already factored in the bearish developments.

Bitcoin initially dropped sharply after the Senate failed to advance the CLARITY Act, falling over 3% to $75,584. However, it rebounded from a low of $74,911 to reclaim $76,000 and close at $76,144. The recovery was attributed to the fact that the rate hike was already priced in.

Renewed ETF demand, lower oil prices, declining Treasury yields, and short covering also contributed to BTC's rally. Spot Bitcoin ETFs recorded substantial inflows, with CoinGlass data showing $159.50 million in inflows on Thursday and $433 million on Friday.