Bitcoin is holding above US$75,000 after a Fed hike and failed crypto vote — can the rally survive?

Bitcoin has just absorbed two pieces of news that would normally be expected to hurt speculative assets.

The US Federal Reserve raised interest rates by 25 basis points to 3.75%–4.00% this week, its first increase since 2023. A day earlier, the US Senate failed to advance the CLARITY Act, a major crypto market-structure bill that the industry had spent months pushing through Congress.

Bitcoin is still trading around US$76,000.

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That leaves the cryptocurrency well above the roughly US$60,000 levels seen in late August, when it had fallen almost 50% from its October 2025 peak above US$126,000.

The recovery has been supported by renewed ETF demand and a more bullish options market, but the latest policy developments remove two potential supports.

The Fed is signalling that rates could remain high for longer, while Congress has failed to deliver the regulatory framework many crypto companies had hoped would accelerate US adoption.

Bitcoin now faces a different test: whether the rebound can continue without easier monetary policy or a near-term legislative breakthrough.

The current rally started from a much weaker base than Bitcoin’s 2025 highs. After spending months around two-year lows near US$60,000, Bitcoin pushed back above US$70,000 in late August as Treasury yields eased and broader risk sentiment improved. The move has since extended towards the mid-US$70,000s. That still leaves Bitcoin far below the record above US$126,000 reached in October 2025, but the direction has changed materially from the first half of 2026.

For Australian traders, the combination creates exposure to two very different forces: stronger underlying Bitcoin demand versus a tougher macro and regulatory backdrop.

The Fed’s September move was widely expected, but the broader policy path is less supportive for crypto. The central bank raised its benchmark rate to 3.75%–4.00% and signalled that another increase could still follow in 2026. 

Higher rates create competition for capital. Cash and US government bonds offer higher yields, while Bitcoin provides no income stream. Rising Treasury yields can therefore reduce the relative appeal of holding volatile assets.

Bitcoin has already dealt with this pressure once in 2026. Long-term US yields approached 5% ahead of the Fed decision, creating another reason for investors to favour fixed-income returns over crypto.

The more important signal is Bitcoin’s response.

Rather than returning towards August lows after the Fed hike, Bitcoin remained near US$76,000 on September 17. That suggests the hike itself was largely priced in.

The next test is whether the Fed follows through with further tightening. One additional increase would keep financial conditions restrictive. A longer hiking cycle would create a much harder environment for Bitcoin and other crypto assets.

The political setback was more direct. The CLARITY Act was designed to create a federal framework governing digital assets and clarify how responsibilities would be divided between the Securities and Exchange Commission and Commodity Futures Trading Commission. 

It failed to secure the 60 Senate votes required to advance. The measure received 50 votes in favour and 49 against, with four Republican senators joining Democrats in opposition. Congress is also preparing to leave Washington ahead of the November midterm elections, leaving the bill effectively stalled for now.

The legislation was important because the US crypto industry has argued that regulatory uncertainty has limited investment and adoption. 

Without new legislation, the SEC and CFTC can continue writing rules under existing authority, but those rules may prove less durable than laws passed by Congress.

Bitcoin fell as the vote moved towards failure, but the broader recovery has remained intact.

That response also highlights an important distinction between Bitcoin and the wider crypto sector.

Bitcoin is already the most institutionalised digital asset. It has regulated US exchange-traded products, deep derivatives markets and substantial institutional participation. The CLARITY Act was therefore potentially more transformative for crypto exchanges, token issuers and smaller digital assets than for Bitcoin itself. That helps explain why crypto-linked equities reacted more sharply to the Senate vote.

Coinbase fell more than 8% following the failed procedural vote, while other crypto-related shares also came under pressure. Bitcoin initially dipped below US$76,000 but stabilised soon afterwards.

For Bitcoin, regulatory clarity remains supportive.

But its investment case is increasingly driven by broader factors including institutional flows, liquidity, Treasury yields and demand for a scarce digital asset. The Senate setback therefore removes a potential upside catalyst without necessarily undermining the entire Bitcoin recovery.

The recovery in ETF demand may provide one of the clearest tests of whether Bitcoin’s rebound has depth. Nearly US$2 billion flowed into Bitcoin ETFs during the week of August 17 following eight consecutive weeks of outflows earlier in the year. That shift coincided with Bitcoin’s move away from the US$60,000 area.

ETF demand is important because it provides a direct route for institutional and traditional retail investors to gain Bitcoin exposure without holding the cryptocurrency directly. If inflows continue despite higher rates, they could offset some of the liquidity pressure created by tighter monetary policy.

Renewed outflows would tell a different story.

Bitcoin’s recovery would then be relying more heavily on existing crypto-market positioning rather than new capital entering through regulated investment products.

Bitcoin’s rebound has already carried it more than 20% above the lows around US$60,000. The next major psychological level sits around US$80,000. That level also appears prominently in the derivatives market. Reuters reported around US$710 million of December options open interest concentrated at the US$80,000 strike, with another roughly US$530 million around US$100,000.

Those positions do not predict where Bitcoin will trade. They do show where a meaningful amount of speculative interest is concentrated. A sustained move above US$80,000 would extend the recovery from the August lows and push Bitcoin further away from the two-year lows that dominated the first half of 2026. Failure to break through would leave the cryptocurrency caught between improving investor demand and a less favourable macro environment.

Three signals now stand out.

• ETF demand: Continued inflows would provide evidence that institutional investors are still adding exposure despite higher rates.

• Fed guidance: The difference between one additional hike and a sustained tightening cycle could materially change liquidity conditions for crypto.

• US regulation: The CLARITY Act has stalled, but regulators can still develop rules under existing authority and the legislation could be reconsidered later.

Bitcoin has already absorbed the first Fed hike and the failed Senate vote without returning to its August lows. The durability of the rally will depend on whether fresh capital continues entering while those headwinds persist.

Bitcoin’s rebound from around US$60,000 to the mid-US$70,000s has occurred alongside unusually large swings in interest-rate expectations, bond yields and US crypto policy.

Through Mitrade, eligible Australian clients can use CFDs to take long positions when expecting Bitcoin to rise or short positions when expecting further weakness.

Stop-loss and take-profit orders can be used to define exit levels, while pending orders allow positions to open only when a chosen price is reached.

Accounts can be funded in AUD, and a demo account is available for testing strategies without committing real capital.

Mitrade is regulated in Australia by ASIC. Crypto CFDs are leveraged products, so both gains and losses can be magnified.

Three things to watch next

1. US$80,000: Bitcoin is approaching a level where derivatives positioning has become increasingly concentrated.

2. Bitcoin ETF flows: Continued inflows would support the view that the rebound is attracting fresh institutional capital.

3. The Fed’s next meeting: Another rate increase would keep pressure on liquidity and Treasury yields, while a pause would remove one immediate headwind.

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