Bitcoin Surmounts Rate Hike and Failed Clarity Act Vote to Reclaim $86,000

Bitcoin (BTC) has made a significant recovery and reclaimed the $86,000 mark despite two bearish catalysts - the Federal Reserve's rate hike and the Senate's failure to pass the CLARITY Act. According to BitGo Research, BTC absorbed these developments, with its price action standing out compared to other assets like gold and equities.

The flagship cryptocurrency initially dropped sharply after the Senate rejected cloture on 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 ETF demand and short covering supporting the rally.

As interest rates rose by 25 basis points, BTC's price dropped further but quickly recovered, crossing $80,000 and settling at $80,875. This rebound occurred as spot Bitcoin ETFs recorded substantial inflows, with CoinGlass data showing $159.50 million in inflows on Thursday and $433 million on Friday.

Greg Cipolaro from BitGo Research stated that BTC's reaction contrasted with traditional assets like gold after the Federal Open Market Committee (FOMC) raised interest rates. Cipolaro argued that the flagship cryptocurrency's muted reaction to the hike and the CLARITY Act setback likely means the price action had already factored in the bearish developments.