CLARITY Bill Stalls + Fed Decision Night: Crypto Market Seeks Direction Amid a Double Test

Two major events happened in crypto today, each capable of affecting short-term trends—and they happened to land on the same day.

First, the CLARITY bill failed.

In a procedural vote in the U.S. Senate, 49 voted in favor and 50 against, falling 11 votes short of the 60-vote threshold. All votes in favor came from Republicans, with none from Democrats. This federal regulatory framework, which the industry had high hopes for, got stuck on the political issue of the “ethics provisions concerning the president’s family crypto businesses.”

The market’s reaction was immediate—Coinbase fell 10%, Circle fell 11%, MicroStrategy fell 5%, and Robinhood fell 3%. Within 24 hours, 115k people were liquidated across the market, with nearly $300 million in long positions liquidated. But Bitcoin fell only about 4%, from $79k to $75.6k. Why did stocks fall more than crypto? Because the valuations of those companies included a premium based on the bill passing. Once the bill failed, that premium went to zero. Bitcoin did not have that premium, so it fell the least.

Is the bill dead? No, but it is unlikely to move forward in the short term.

Senator Kennedy said he was “not surprised, but does not believe the bill is dead.” Senator Lummis said she would continue pushing for it. But the problem is that lawmakers will leave Washington this month to prepare for the midterm elections in November, and efforts to restart the bill may have to wait until the “lame-duck session.” In plain English: Washington will not touch this hot potato before the election.

But regulatory efforts will not come to a standstill. The Coinbase CEO made a key statement: “We can’t keep waiting around for Congress. The SEC and CFTC already have enough tools to establish clear rules.” a16z’s Chris Dixon emphasized that the crypto industry’s fundamentals are stronger than ever, with billions of dollars moving on-chain. BlackRock’s Bitcoin ETF attracted about $1.08 billion in 20 days, while the SOL spot ETF has continued to see net inflows. The bill fell in the Senate, but money continues to flow through the ETF channel.

Second, tonight’s Fed decision.

At 2:00 a.m. Beijing time tomorrow, the rate decision will be announced, followed by a press conference at 2:30 a.m. CME data shows an 86.5% probability of a 25-basis-point rate hike. Goldman Sachs has already revised its forecast from “rates unchanged” to “a 25-basis-point hike.” Core CPI rose 0.3% month over month, 0.1 percentage point higher than expected, while energy prices continue to add fuel to the fire.

What would a rate hike mean for crypto?

In the short term, it would be a shock. A rate hike would push up the U.S. dollar and Treasury yields, sending capital from risk assets into safe-haven assets. The market could fluctuate violently within 30 minutes to 2 hours after the decision is announced. Anyone with open positions should prepare defensively in advance.

But how much has the market already priced in? Crypto is down about 32% this year, and substantial expectations of tightening have already been reflected in prices. If the hike fully matches expectations, a “relief rally” could occur—once the bearish news is priced in, prices may stabilize instead.

The key is what Warsh says. The hike itself is not the most important thing; what matters most is whether it is a one-off move or the beginning of a sustained tightening cycle. If he hints that more hikes are coming, Bitcoin could fall to $74k or even $70k. If he downplays further tightening, the market may breathe a sigh of relief, and Bitcoin could reclaim $80k.

Overall assessment: Bearish in the short term, but not excessively pessimistic.

Bitcoin’s key support is in the $75k–$76.5k range. If it breaks below that level, the next areas to watch are $72.8k and even $70k; resistance is at $79k–$80k. Ethereum has held up better than Bitcoin, briefly touching $2,660 this week. Ethereum ETFs have recorded net inflows for four consecutive weeks, with institutional demand clearly stronger than for Bitcoin.

In terms of execution: Keep positions light and wait ahead of tonight’s decision. Do not rush in the moment the data is released—wait 15 to 30 minutes, confirm the direction through the candlestick body, and then make a decision. If Bitcoin holds the $75k support after the hike and rebounds on rising volume, consider cautiously taking a small long position; if it breaks below $75k and rebounds weakly, follow the trend lower toward $72.8k or even $70k.

The failure of the CLARITY bill will not change the crypto industry’s long-term direction. Political battles are playing out in Washington, while real money is flowing on-chain. The bill is stuck, but the money is not.

We’ll be watching the market live tonight and witnessing it together.

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