This week, the crypto market found itself squeezed between Bitcoin's technical level, the Fed's rate rhetoric, and the first stage of voting on the Clarity Act. Crypto trader and investor DaanCrypto shared his assessment of the market ahead of the Fed meeting.
The Rate Remains the Main Source of Uncertainty
The Fed meeting and the rate decision on Wednesday remain the week's main event. According to the trader, the market is already pricing in roughly an 80% probability of a hike, so the hike itself won't come as a surprise.
What matters more is the regulator's subsequent rhetoric — whether the hike turns out to be a one-off move or the start of a series. Soft wording around the hike could spark a rally, while holding the current rate steady might be read by the market as a political concession — in which case bond yields would head higher.
“The week will stay volatile either way: the market first has to get through the regulator's meeting, and only after that can trading calm down,” he wrote.
Bitcoin at a Major Resistance Level
Bitcoin is sitting at a major resistance level on the higher timeframe: the price is hovering around this level and gradually edging down. According to the trader, the most likely scenario is that the price still reaches the $83,000 mark and sweeps liquidity in that zone — even if it's then rejected and reverses lower.
“Holding the $73,000–$74,000 zone is critical for keeping the medium-term bullish outlook intact,” the analyst noted.
The Clarity Act and the Capital Reaction
The week's second catalyst is the Clarity Act. Citing reports from the Associated Press, the trader noted that Trump agreed to a bipartisan ethics rule as part of the major crypto bill: it would require divesting crypto assets from personal portfolios or placing them in a blind trust. This is only progress at the first stage, not the bill's final passage — after the vote, it still has further stages of review ahead.
Following this news, some investors are positioning for a positive vote outcome, which has made the crypto market look stronger relative to the rest of the market.
“If the decision turns out negative, that same flow of capital could reverse and start pressuring the price,” the analyst wrote.
Altcoins are trying to rise, but Bitcoin's weakness is holding them back. After a series of sharp swings during the day, Ethereum continues its slow climb and shows the same compression pattern ahead of Wednesday's Fed meeting: this kind of pattern usually ends either in a breakout or a sharp drop.
The trader believes the market will next go through several checkpoints: whether Bitcoin holds the $73,000–$74,000 zone, whether the $83,000 level gets tested, whether the Fed's decision turns out to be a one-off hike or signals the start of a cycle, and how the crypto market reacts to the Clarity Act's fate after its first stage.