Bitcoin Tests Key Levels Ahead of Fed Decision Amid Regulatory Disappointment
Bitcoin's price recovery is under scrutiny as it approaches key levels ahead of the Federal Reserve's decision on interest rates. The cryptocurrency had fallen to around $74,888 after the US Senate failed to advance the CLARITY Act, which aimed to create a framework for digital assets in the United States. However, Bitcoin has since recovered and is trading near $75,500.
The loss of two major tailwinds, softer Treasury yields and improving risk appetite, means that macro conditions are carrying more weight into Wednesday's Fed decision. A 25 basis point rate hike is now almost certain, with markets assigning a 90% probability to the move. Independent financial researcher Joseph Edwards told Reuters that such a hike would likely put a damper on the recent rally.
What happens next may reveal more about underlying demand for Bitcoin than the Fed's decision itself. If buyers can defend $75,000 after regulatory disappointment and tighter policy, it could indicate that real demand is present in the market.