Bitcoin Tumbles as Senate Vote Looms and Rate Hike Fears Rise

Bitcoin took a hit on Tuesday, falling to its lowest close since the golden cross formed earlier this week. The price dropped by $1,871, or 2.39%, as the market weighed in on the looming Senate vote on the Digital Asset Market Clarity Act and the Federal Reserve's interest rate decision.

The Clarity Act is a comprehensive piece of legislation that aims to provide clarity on the regulation of digital assets. However, its passage is uncertain, with prediction markets indicating a 50/50 chance of it becoming law in 2026. A failed cloture vote would shelve the bill until after the midterms, leaving the industry to operate under the current patchwork of rules.

The market's uncertainty was further exacerbated by the prospect of a rate hike by the Federal Reserve tomorrow. As traders braced for this outcome, stock futures slipped, and oil prices spiked due to supply fears in the Middle East.