Bitcoin rose 0.8% to $77,760.7 on Monday, steadying after last week's decline as traders weigh worsening Middle East tensions against this week's Federal Reserve rate decision. Bitcoin ETFs have also swung from strong inflows to outflows even as the broader crypto market drifts higher ahead of a packed week for both stocks and crypto.
The move came Monday as markets parsed worsening clashes in the Middle East alongside mounting expectations that the Federal Reserve will hike interest rates this week, after Bitcoin lost some 3% last week.
Broader crypto prices advanced slightly but stayed rangebound below recent highs. Ether rose 0.2% to $2,518.72, while XRP added 1.7%.
Middle East tensions push oil prices higher
Bitcoin steadied even as a renewed surge in oil prices spooked other risk-driven markets. The U.S. and Iran remain at odds over the Strait of Hormuz, but Yemen's Iran-aligned Houthis have now opened a new front by attacking Saudi Arabia and shipping in the Bab al-Mandab strait.
Houthi actions could cut off another 4% to 5% of global oil supply, a trend likely to further underpin oil's risk premium. That, in turn, has spurred concerns over energy-driven inflation that could invite higher global interest rates — a dynamic that bodes poorly for Bitcoin and other speculative assets. Brent crude has crossed $107. The 10-year Treasury yield sits near 4.97%, adding to the inflationary backdrop.
Fed decision looms as ETF demand cools
Markets are increasingly pricing bets that the Fed will hike rates by 25 basis points this week, with several policymakers flagging concerns over increasingly sticky inflation. Coinpedia reports markets are pricing an 86% probability of a 25-basis-point hike at Wednesday's meeting.
US spot Bitcoin ETFs pulled in $3.34 billion between August 19 and September 4, fueling Bitcoin's climb from roughly $62,000 to $82,000. But the final four sessions before September 14 saw combined outflows of $462.7 million, signaling softening institutional appetite at higher prices. Still, on-chain data offers reassurance: Glassnode's Sell-Side Risk Ratio has dropped to 7 basis points per day from 16 at August's peak. Long-term holders accounted for just 47% of realized profits, down from 88% in August — a sign older holders aren't dumping positions despite cooling ETF demand.
Clarity Act vote adds to the uncertainty
In crypto, focus is also squarely on whether the U.S. Congress will proceed with a vote on the Clarity Act. Pro-crypto policymakers called for a vote on the long-delayed bill on Tuesday, though it remains unclear whether it can clinch the 60-vote threshold needed to pass. Policymakers, industry insiders and banking lobbyists continue to clash over the act's treatment of stablecoin yields and a provision on ethical standards limiting officials from investing in crypto.
The odds of the Clarity Act becoming law in 2026 climbed to 31% on Polymarket after Senate Republicans released a revised bill Sunday night. Bitcoin's $76,600 support and the deeper $71,000 level offer clearer reference points as leverage risk builds ahead of the Fed decision.
Sources: Cryptocurrency News, Coinpedia Fintech News
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