Bitcoin drops 2.4% as Senate votes on Clarity Act, Fed rate decision looms
In brief
- Bitcoin dropped to $76,076 intraday, erasing its post-golden-cross rally in a single session
- Senate scheduled cloture vote on Digital Asset Market Clarity Act for 2:15 p.m. ET, requiring 60 votes
- Federal Reserve expected to hike rates, with stock futures and Treasury yields moving higher
Technical breakdown: momentum fades
The technical picture had looked constructive before Tuesday's selloff. Bitcoin's 50-day exponential moving average crossed above the 200-day EMA a few days ago—the golden cross, a classic bullish signal traders rely on. The Average Directional Index (ADX) was sitting at 42.8, well above the 25 level that confirms a trend is actually in place. But momentum had already started to crack.
The Relative Strength Index was at a neutral 50.5, neither overbought nor oversold. More worrying: the Squeeze Momentum Indicator had been flashing "on" for a full week with momentum reading -1.17 and still falling. Bitcoin broke decisively below the $79,113 Fibonacci level and was testing the space just above the 50% retracement at $75,569. The move felt like capitulation.
Senate vote and regulatory uncertainty
The selloff arrived as the Senate prepared to vote on crypto's most watched piece of legislation. The cloture vote on the Digital Asset Market Clarity Act was set for 2:15 p.m. ET, and it needed 60 votes in a fully seated Senate—math that had grown shakier by the week. A failed vote wouldn't kill the bill outright, but it would shelve comprehensive crypto market-structure legislation until after the midterms, leaving the industry operating under the SEC and CFTC's current patchwork of rules and enforcement actions. Prediction markets tracking the bill's odds of becoming law in 2026 had slid heavily as September rolled around before ticking back up modestly.
Macro headwinds pile on
Bitcoin wasn't the only asset under pressure. Stock futures slipped Tuesday morning as Wall Street braced for the Federal Reserve's decision on interest rates. Traders were pricing in a rate hike rather than a cut—the least fun outcome on the table. The S&P 500 and Nasdaq both opened lower, and the 10-year Treasury yield was flirting with its highest levels since 2023. Oil was spiking on Middle East supply fears. Risk-off was the theme, and crypto wasn't sitting this one out.
Frequently asked questions
What is the golden cross and why do traders watch it?
The golden cross occurs when a shorter-term moving average (the 50-day exponential moving average) crosses above a longer-term one (the 200-day EMA). Traders use it as a classic bullish signal that an uptrend may be forming. Bitcoin's golden cross appeared just days before Tuesday's selloff, making the subsequent collapse especially notable.
What is the Digital Asset Market Clarity Act?
The Clarity Act is comprehensive crypto market-structure legislation the Senate was voting on. If the cloture vote failed, it would shelve the bill until after the midterms, leaving the crypto industry to operate under the SEC and CFTC's current patchwork of rules and enforcement actions.
