Key Takeaways
- Bitcoin’s price tumbled below $76,000 as a Senate deadlock over the CLARITY Act and rate-hike fears wiped out gains.
- Over $98 million in long bets were liquidated as the Crypto Fear and Greed Index sank from 81 to 67 by Sept. 15.
- Cake Wallet CEO Vik Sharma expects minimal impact on bitcoin’s thesis from the Fed’s planned Sept. 16 rate hike.
Market Reversal
Bitcoin wiped out Monday’s gains, tumbling below $76,000 as Senate negotiations over the CLARITY Act remained deadlocked. The reversal came ahead of a crucial Federal Open Market Committee (FOMC) meeting, where officials are widely expected to deliver a quarter-percentage-point rate hike.
However, market data shows that up until the late afternoon of Sept. 14, the leading cryptocurrency had been building on an earlier rally that pushed the price past $78,000. Bitcoin eventually lost momentum soon after hitting a session high of $79,579, starting a gradual decline that breached the $77,000 support level.
With unrelenting selling pressure, the bitcoin price eventually slipped to a daily low of $75,560, its lowest point since Aug. 21. Although the cryptocurrency attempted to rebound, bitcoin remained below $76,000 at 10:41 a.m. EDT, down 3.5% over 24 hours.
After largely anchoring firmly above $77,000 for nearly three weeks, bitcoin’s clean break below key support signals a sharp macro pivot. The euphoria surrounding U.S. Treasury bond buybacks may have surrendered to mounting rate-hike anxiety. This rapid deterioration in market conviction is mirrored in the Crypto Fear and Greed Index, which plunged from extreme greed at 81 on Aug. 21 down to a far more cautious 67 by Sept. 15.
Industry leaders are bracing for the Federal Reserve’s policy decision on Wednesday, Sept. 16. Vik Sharma, CEO of Cake Wallet, remains skeptical that the expected quarter-point hike will do anything to reignite bitcoin’s momentum.
“Higher rates can squeeze corporate profits and weigh on stocks. Bitcoin has no earnings to miss and no central bank controlling its supply,” Sharma said. “Traders may sell both on the same headline, but in my view, a Fed hike should change the outlook for equities, not the long-term case for Bitcoin.”
Lea Thompson, marketing manager at Cake Wallet, argued that the pending Fed announcement is less about bitcoin’s immediate direction and more about the path ahead. Thompson said the “more important signal is how the guidance changes expectations for real yields, dollar strength and liquidity conditions.”
While the Fed decision will likely move bitcoin in the short term, Thompson noted that the real story is not how bitcoin’s price reacts, but what “it changes about the macro environment around it.”
Bitcoin’s price action over the last 24 hours proved catastrophic for traders with long positions. Coinglass data shows bitcoin’s volatility triggered the liquidation of more than $98 million in long bets and roughly $45 million in leveraged short positions. Across the broader cryptocurrency market, nearly $300 million in long positions was wiped out, compared with $190 million in shorts.
