Bitcoin holders are facing another harsh market test as the cryptocurrency slipped to trade around $76,200 following a volatile week. Downward pressure was triggered by back-to-back headwinds: the failed passage of the CLARITY Act in the Senate and the Federal Reserve’s rate hike decision.
Political gridlock in Washington served as the first stumbling block. The US Senate vote on the CLARITY Act garnered only 50 votes in favor against 49 opposed. That slim majority was not enough to advance the bill, failing to clear the mandatory 60-vote threshold required for cloture.
Disappointing news from the legislative front was quickly followed by pressure from the central bank. The Fed’s decision to raise benchmark interest rates by 25 basis points immediately weighed on risk assets. This monetary tightening pushed US Treasury yields higher, which in turn drew capital away from non-yielding assets like Bitcoin.
Red Signals from Technical Indicators
These fundamental blows quickly left their mark on the price chart. The Supertrend indicator on the 4-hour chart flipped bearish and now sits above price action. This shift creates a new resistance level that buyers must confront around $78,600.
The challenging situation was further confirmed by daily capital flow metrics. The Chaikin Money Flow (CMF) indicator slid to -0.11, signaling that selling pressure is dominating transactions. This capital outflow contrasts with the healthy trend seen when the CMF held consistently above the zero line throughout most of late August to early September.
Bitcoin currently remains pinned below its 20-day moving average at $78,104. Gathering enough momentum to reclaim this level would serve as an early sign of price recovery. Meanwhile, liquidation data marks the current price range as a crucial zone defining the stability of the overall market structure.
Downside Risks Toward the $70K Level
The consequences of buyers losing control cannot be underestimated. Failing to promptly reclaim the 20-day MA risks forcing a deeper correction to test support levels below.
A continued downside scenario leaves Bitcoin exposed to a lower cluster of moving averages, specifically between $70,300 and $71,900. This lower boundary will determine the medium-term trend before price has any opportunity to rebound.
The combination of regulatory hurdles and monetary tightening has sharply halted crypto price momentum over the past week. Monitoring price action around these critical levels appears to be the most sensible approach before taking positions against prevailing market trends.
Reported via crypto.news.
Read also: What Is Bitcoin Halving?
Previously: $1.95 Billion Bet Surrounds Bitcoin Ahead of Fed Decision - Danger Lurks from Both Sides
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
