Bitcoin climbed back above $80,000 this week even after a run of setbacks: the CLARITY Act failed to advance in the US Senate, the Federal Reserve raised rates for the first time in over three years, and the Bank of Japan hiked to a 31-year high. The bounce came days after BTC dropped to $75,000.
A week stacked against bitcoin
A week ago, investors were already watching the Fed's policy meeting alongside a Senate vote on the CLARITY Act and a possible Bank of Japan rate move. None of the three went bitcoin's way: the CLARITY Act failed to advance on Tuesday, the Fed delivered its first hike in over three years, and the Bank of Japan followed with a hike of its own. Yet bitcoin held strong through all three events.
The dip to $75,000
BTC had already been rejected at $80,000 a day before the CLARITY Act vote. After the vote failed, it dropped to a multi-week low of $75,000 — a $5,000 slide in 24 hours. More than 23,000 BTC moved onto exchanges at a loss following the vote, which CQ described as a major capitulation event.
Two central banks tightened at once
The Fed then raised its target range by 25 basis points to 3.75%-4%, its first move since July 2023. That rate hike may have been priced in already, but policymakers kept a hawkish tone as inflation remains elevated, leaving another increase on the table for later this year. Higher rates strengthen the competition from yielding assets, tighten financial conditions, and tend to support the dollar — none of it favorable ground for bitcoin bulls.
Then the Bank of Japan added to the pressure on Friday, lifting rates by 25 basis points to 1.25%, the highest level in 31 years. Japan has supplied some of the world's cheapest funding for decades, so tighter policy there carries broader implications for global liquidity and carry trades.
Despite all three setbacks landing in the same week, bitcoin held its ground and climbed back above $80,000.
Source: CryptoPotato
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