Crypto Markets Bounce Back After Fed Hike and CLARITY Setback
The past week was expected to be challenging for crypto markets, but Bitcoin (BTC) held its ground despite several setbacks. The CLARITY Act, which aimed to bring clarity to US crypto regulations, stalled in Congress, and the Federal Reserve raised interest rates for the first time since 2023.
However, institutional flows turned cautious, with ETF outflows appearing around major events. Strategy paused buying for a second week, but net inflows returned quickly on September 17th, showing demand remained resilient. Futures Open Interest (OI) had already fallen sharply before the CLARITY vote, and liquidations flushed more longs from the market.
Despite these challenges, leverage in the crypto markets has been significantly reduced, making the market structure look healthier despite volatility.