Ethereum Plunges to $2,400... 'Double Shock' from CLARITY Act Rejection and Fed Tightening Concerns

▲ Ethereum (ETH), sell-off, bear market, bull market, cryptocurrency decline/AI-generated image ©

Ethereum (ETH) plunged nearly 6% in a single day, falling to the $2,400 level. Regulatory uncertainty increased with the rejection of the CLARITY Act, a US cryptocurrency market structure bill, in a Senate procedural vote. This, coupled with concerns over the Fed's interest rate hike and the breakdown of technical support levels, amplified selling pressure.

According to CoinMarketCap, a cryptocurrency market data aggregator, Ethereum recorded a 5.99% decrease over 24 hours to $2,401.85 on September 15 (local time). During the same period, the total cryptocurrency market capitalization fell by 4.22%, and Bitcoin (BTC) by 4.07%. The correlation between Ethereum and the S&P 500 was 82%, indicating that this decline was tied to a macroeconomic risk-off trend not limited to the crypto market.

Regulatory uncertainty significantly pressured investor sentiment. The probability of the CLARITY Act being legislated, as reflected in the decentralized prediction market Polymarket, plummeted from 30% to 14% a day earlier amid political deadlock. Subsequently, the cloture vote on the CLARITY Act in the US Senate failed to secure the 60 affirmative votes needed to advance the bill, leading to its rejection. Growing concerns that regulatory clarity could be delayed stimulated a risk-off sentiment across the cryptocurrency market.

Caution surrounding the Fed's monetary policy also contributed to the decline. The market reflected a 94% probability of the Fed raising its benchmark interest rate by 25 basis points on the 16th, raising concerns that the opportunity cost of holding non-yielding assets like Ethereum could increase. Furthermore, ETH broke below the lower support trendline of its ascending channel on the daily chart, leading to expanded technical selling. The Relative Strength Index (RSI) approached oversold territory at approximately 33.

In the short term, $2,380-$2,400 is a critical defense line. This range coincides with Tuesday's intraday low and a major Fibonacci support level. If this level holds, there is a possibility of a rebound attempt towards the $2,550 resistance level, after passing the 50% Fibonacci retracement level of $2,485. Conversely, a decisive break below $2,380 would open the door for further correction to the next major support level of $2,200.

With the CLARITY Act's procedural vote failing, the market's attention now turns to the Fed's policy decision and economic outlook on the 16th. CoinMarketCap analyzed that macro variables such as regulatory uncertainty and monetary policy, rather than Ethereum's own fundamentals, are dictating short-term prices. In particular, whether the $2,380 level can be maintained even after the Fed's announcement is considered a critical turning point that will determine further declines and price stability.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*