Bitcoin Hovers at Two-Week Low

Bitcoin fell to about $75,000 in mid-September, near a more than three-week low as investors reacted to the Senate’s failure to advance a major US cryptocurrency regulation bill. The Clarity Act failed to advance after a 49-50 procedural vote, falling short of the 60 votes required, and would have placed primary oversight of digital assets with the Commodity Futures Trading Commission. The setback leaves uncertainty around the regulatory framework for the crypto industry, with potential implications for business investment, the location of crypto firms and institutional participation in the US, analysts said. Bitcoin has also faced pressure from a less supportive macro backdrop, as higher interest rates and tighter liquidity tend to weigh on demand for speculative assets. The Federal Reserve’s policy decision is due later today, with markets widely expecting the central bank to deliver its first rate hike in around three years.

Bitcoin surged above $80,000 on Tuesday, reaching its highest level since May and bringing its gains since mid-August to about 28%. The move was fueled renewed interest in the “debasement trade” after the US Treasury announced plans to increase purchases of longer-dated government bonds, weighing on long-term yields and the dollar. US spot Bitcoin ETFs also recorded their strongest weekly inflows in 10 months, attracting $1.92 billion, while expectations of continued support for cryptocurrency from the Trump administration added to demand. The advance triggered a major short squeeze, with about $7.2 billion in leveraged bearish crypto positions liquidated last week. Despite the rebound, Bitcoin remains well below its record high of around $126,000 reached last October, while analysts caution that the move may be driven largely by short covering rather than sustained demand.

Bitcoin surged 6% to around $77,370 on Friday, extending gains to over 20% this week, its strongest weekly gain in more than three years, boosted by a broader improvement in risk appetite. The US Treasury announced plans to at least double its purchases of longer-dated government bonds, pushing long-term yields lower and the dollar weaker. The move also triggered a major short squeeze, with billions of dollars in bearish crypto positions liquidated over recent days. Investor sentiment was further supported by President Donald Trump’s meeting with cryptocurrency industry leaders and his call for progress on a new crypto market-structure bill. US spot Bitcoin ETFs have also attracted more than $1 billion in weekly inflows, adding to demand. Despite the sharp rebound, Bitcoin remains well below its record high above $126,000 reached last October.