Bitcoin touched $77,000 on Thursday before settling near $76,600, snapping a monthly-low slide as traders absorbed a unanimous Fed rate hike. The swings triggered over $260 million in market-wide short liquidations, while the Senate's failed CLARITY Act vote left DeFi protocols facing regulatory uncertainty.
Bitcoin's price snapped a recent downward trend Thursday, briefly touching $77,000 before settling around $76,600. The rebound followed a slide that had pushed the asset to a monthly low less than 24 hours earlier, after the Federal Open Market Committee unanimously raised interest rates.
Price swings trigger heavy liquidations
According to Bitstamp data, bitcoin traded sideways with $76,000 acting as resistance, before the level flipped to support after 7 p.m. Wednesday and held until 8 a.m. An initial surge drove the price past $77,000 before a quick sell-off sent it briefly below $76,000, and a second push toward $77,000 gave way to a slide that tapered off at $76,200.
The moves forced $66 million in short liquidations against $32 million in longs for bitcoin alone, while the broader crypto market saw nearly $260 million in short liquidations and $138 million in longs. At noon EST, bitcoin held above $76,600, posting a 1% daily gain and a $1.54 trillion market cap.
Fed hike and Wall Street reaction add pressure
The Federal Open Market Committee voted unanimously Wednesday to raise its benchmark rate by 25 basis points to a range of 3.75% to 4%, its first interest rate hike since July 2023. Traders had priced in a 93% probability of the move via CME's FedWatch tool. Wall Street's reaction ran hotter than crypto's: the Dow sank about 1.2% and the S&P 500 slid 0.4% to 0.5% on Wednesday.
CLARITY Act failure clouds DeFi outlook
Bitcoin's earlier slump had begun with stalled progress on the Senate's CLARITY Act, whose failure left protocols like Curve Finance facing regulatory uncertainty. Democratic lawmakers defended rejecting the bill despite gaining several key concessions from Republicans, with Sen. Angela Alsobrooks citing GOP leadership's refusal to accept presidential ethics and divestment demands.
According to Curve Finance: "a protocol could fall into the 'non-decentralized' category" under the bill's text if a person or group could materially alter how it works. The bill's defeat also cost the industry explicit legal definitions distinguishing decentralized protocols from centralized entities, a setback Curve Finance said it hopes will be resolved if the legislation eventually passes.
Sources: Bitcoin News, Decrypt
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