Bitcoin Slumps on Regulatory Disappointment and Rate Hike Expectations

The recent decline in Bitcoin's price has left traders on edge, as regulatory disappointment and tightening monetary expectations converge in an already unstable market.

The failure of the CLARITY Act vote in the US Senate is a major setback for crypto regulation, according to Capital Market commentator the Kobeissi Letter. The bill aimed to establish a federal market structure framework for digital assets and clarify the roles of the Securities and Exchange Commission and Commodity Futures Trading Commission.

The immediate question is whether Bitcoin's drop to $75K is temporary or weakening demand is creating room for a deeper correction. Onchain data shows that short-term holder (STH) selling is adding pressure, with STH wallets sending up to 34,000 BTC to exchanges on a rolling 24-hour basis.

The expected rate hike is largely priced in, but traders will focus on the Fed's guidance. A less hawkish tone could ease pressure on risk assets, while signals of further tightening could keep Bitcoin under pressure.