Fed Decision and CLARITY Act Vote to Test Crypto Market Rally
The altcoin market capitalization has climbed 21% over the past month, but this gain hasn't translated to an increase in their share of the combined Bitcoin-and-altcoin market. According to Glassnode data as of September 7, the altcoins' share of the market fell by 0.9 percentage points over 90 days.
While capital has moved up the entire crypto ladder, with Bitcoin absorbing most of the gain, higher-beta tokens have held their ground without gaining. This divergence sets up an unusually clean test this week, with both the Federal Reserve and the US Senate having key decisions that could impact the market.
The Fed's decision on interest rates is expected to be a major driver of the market's direction, with 85% of economists predicting a 25-basis-point rate hike to 3.75%-4%. The spot Bitcoin ETFs have also seen significant outflows, totaling $463 million from September 8 to 11, but flows turned positive on September 14 with $159.9 million in net inflows.
The outcome of the Fed's decision and the Senate's vote on the CLARITY Act will be crucial in determining whether the market continues to rally or corrects itself. If the Fed delivers a softer hike and cloture advances, Bitcoin could test the options market's next real cluster of interest near $100,000.