Clarity Act, Interest Rate Hike, ETF Outflows – Despite All This, Bitcoin's $75,000 'Ironclad Defense'

▲ Bitcoin (BTC) ©Go Da-sol

Bitcoin (BTC) rebounded to $76,670 after defending $75,000 despite a 'triple shock' of the failure of the Clarity Act vote, the Fed's interest rate hike, and large-scale ETF outflows. However, analysis suggests that for further gains, the US 10-year Treasury yield must remain below 5%, and Bitcoin spot ETF fund flows must turn into net inflows.

According to the investment media TradingNews on September 17 (local time), Bitcoin rose 2% to $76,670.09 from $75,499 24 hours earlier. Previously, the US cryptocurrency market structure bill, the Clarity Act, failed to secure the 60 votes needed for passage in the Senate cloture vote (49 to 50), pushing BTC below $75,000, and leading to $771 million worth of positions being liquidated in the cryptocurrency market within 24 hours. Among these, long position liquidations accounted for $568.5 million, or 74% of the total.

Subsequently, the Fed raised the benchmark interest rate by 0.25 percentage points to 3.75-4.00%, but Bitcoin quickly absorbed the shock. The Federal Open Market Committee (FOMC) unanimously decided 12-0 to implement the first interest rate hike since July 2023. Immediately after the rate decision, BTC rose to $76,499.99 but gave back its gains within 30 minutes. The Fed's median forecast for the year-end benchmark interest rate increased to 4.1%, with 16 out of 18 members anticipating further tightening. TradingNews pointed out that high real interest rates are a burden for Bitcoin, which does not pay interest.

Institutional supply and demand also remain weak. On September 16, US Bitcoin spot ETFs saw a net outflow of $295.98 million, with BlackRock's iShares Bitcoin Trust (IBIT) experiencing the largest outflow of $144.11 million. ARK's ARKB recorded a net outflow of $84.4 million, Fidelity's FBTC $52.72 million, and Grayscale's GBTC $18.22 million. The total net assets of US Bitcoin spot ETFs were tallied at $95.185 billion, with cumulative net inflows since launch reaching $54.569 billion.

Conversely, some burdens in the macro environment eased. The US 10-year Treasury yield rose to 5.02% immediately after the Fed's decision but fell to 4.949% on Thursday, and West Texas Intermediate (WTI) crude oil dropped below $100 per barrel. The Nasdaq Composite Index also rose by 1.7%. The media analyzed that if Treasury yields remain below 5% and ETF fund flows turn into net inflows, Bitcoin could have room to retest $80,000.

In terms of price, $75,000 was presented as a key defense line. Short-term resistance levels are $77,254.59 and $80,000, and if these are surpassed, the monthly high of $82,178.60 was cited as the next target. Conversely, if it falls below $74,000 on a daily closing basis, the existing outlook would be invalidated, potentially opening up downside risk to $70,000 and the monthly low of $62,745.50. TradingNews analyzed that a shift to ETF net inflows and the 10-year Treasury yield staying below 5% are key conditions for an uptrend, and until then, the $74,000-$80,000 range is the main price zone.

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