Bitcoin faces further downside risk after Clarity Act failure, ahead of FOMC decision

FUNDAMENTAL OVERVIEW

Bitcoin experienced downward pressure on Wednesday as the likelihood of the Clarity Act cloture vote succeeding diminished ahead of the Senate session. The measure ultimately failed to pass, and with a more fragmented Congress anticipated following the midterm elections, comprehensive crypto market structure legislation is unlikely to move forward again this year. This regulatory disappointment weighed on the cryptocurrency, briefly sending it beneath the critical $75,500 support level.

Attention now returns to the macroeconomic landscape, with the FOMC rate decision due later today serving as a major event. The outcome could generate significant volatility, particularly if it deviates from market expectations. The prevailing view is that the Fed will raise rates by 25 basis points, potentially with one or two dissenting members voting to hold steady. This meeting also includes the release of the Summary of Economic Projections (SEP) and the Dot Plot.

Traders will be watching the Dot Plot closely, with the Fed expected to indicate two additional rate increases, one in 2026 and another in 2027. That projection would still trail current market pricing, which anticipates three more hikes by the end of 2027. Fed Chair Warsh is unlikely to provide much forward guidance, instead reiterating his message from the Jackson Hole symposium.

A signal from the Fed of three or more further rate hikes would likely be interpreted as a hawkish surprise and put additional pressure on Bitcoin. Conversely, a forecast indicating just one or two additional increases could be seen as dovish and potentially provide a lift for the cryptocurrency.

Another key area of focus is Middle East developments, as oil prices remain above the $100 level, stoking inflation concerns amid escalating disruptions. Crude prices have been a primary driver of markets lately, meaning any de-escalation in the region could push oil lower and lead to a dovish repricing, which could ultimately support Bitcoin.

For now, the negative macro backdrop is expected to continue capping upside potential and maintaining pressure on Bitcoin. A shift in the outlook—such as a Middle East de-escalation or a dovish Fed decision—would likely be required to alter the picture and open the path to new highs.

BITCOIN TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, Bitcoin tested below the key 76,000 support level before beginning to consolidate around that area ahead of the FOMC decision. Buyers may step in near these levels with a defined risk below the support, aiming for a recovery back toward the 82,500 resistance. Sellers, meanwhile, may look to enter here with a defined risk above the support, targeting a decline toward the 67,000 level next.

BITCOIN TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the 4-hour chart, a downward trendline defines the bearish structure. If a pullback reaches the trendline, sellers may lean on it with a defined risk above, aiming for a break below the support and new lows. Buyers, however, will want to see price break above the trendline to increase bullish bets toward the resistance and target a breakout.

BITCOIN TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1-hour chart, price is consolidating around the support zone as traders await the FOMC decision. From a risk management standpoint, it may be prudent to wait for the decision before committing to new positions, as moves could be aggressive, especially if surprises emerge.

UPCOMING CATALYSTS

Today, the FOMC rate decision is scheduled. Tomorrow, US Jobless Claims figures are due. Traders will also monitor Middle East developments closely.