Bitcoin Absorbed Clarity Act Setback & Fed Rate Hike — Here’s What Happens Next (Bull Run Starting!)

Crypto Casey (0:00)

Two of the worst headlines for Bitcoin dropped within the same 24 hours. Tuesday, the US Senate failed to advance the Clarity Act. They needed 60 votes to pass, 49 voted in favor, 50 against. Total gridlock. And Wednesday, the Fed raised interest rates for the first time in three years. Over $330 million in leverage positions were liquidated, Coinbase encircled down roughly 10%. As for Bitcoin, we had this dip down to 75k, now popping back up to test that 80k resistance level. So have these two bearish events actually created the start of a bullish run? And what else should we be aware of in the midst of the very early beginning of this Bitcoin bull cycle? Hello, I'm Crypto Casey, and in this video, we are going to explore what happened this week, separate the shorter term noise from the longer term implications, and what we should be watching next. Let's hit it.

All right, a few weeks ago, we sounded the alarm. The Bitcoin bull flip on the weekly was confirmed, which means the bull cycle has officially started. The 80k to 83k zone is a battleground we need to watch. This week, Bitcoin lost a small battle, dropping from around 82.4k down to around 75.6k. Losing a battle versus a war are completely different things. What we need more than the Clarity Act is clarity on the Clarity Act, what it actually is, and what the real implications are for us, our crypto fam. Here's the deal, the Clarity Act not passing means that there's nothing new under the sun. Sure, it's passing was a major catalyst the markets were leaning on, which is why it took a tumble when everyone who gambled and leveraged on it passing got liquidated, wiped out, and that is the short-term impact that affects us.

And guess what? It's over. We're good. Because the next time it will affect us is when it comes back around for another attempt to get through the setting, and we will go through the same exact thing again. If it doesn't pass, the market takes a tumble. However, if it does pass, we will likely see a nice pop. Now, another important thing to remember is markets love having something to look forward to. That drives upward price trends. So having that on the horizon again is actually super bullish for us because we literally have more time to take advantage of lower prices for longer, which is amazing. Now, for companies building crypto-related businesses in the United States, the Clarity Act failing to pass is bearish because knowing which rules apply to what products they can offer and how confidently they can invest in and expanding their business is crucial. I mean, if we were trying to open a crypto business and we weren't sure which regulator we need to answer to, even if customers want what we are selling, uncertainty makes the entire process slower, more expensive and hard to plan around. So at the end of the day, this legislative setback negatively impacted crypto businesses longer term.

And for us, sure, a short-term dump, but also longer term opportunities to accumulate more Bitcoin for less and more opportunities to trade increased volatility in the overall crypto market for profit. Now, less than 24 hours later, we had yet another seemingly bearish blow. The Fed increased interest rates by 25 basis points. The first rate hike since 2023, pushing us up between 3.75 and 4 percent. Yes, higher rates tighten financial conditions and tend to make risk on assets like crypto less desirable in the market. However, that is one of the oldest bear cases against Bitcoin in the book. Check it out.

Let's take a look at how Bitcoin responded to the last 5 most recent rate hikes back in late 2022 and the first half of 2023 to the last hike in July. December 2022, Bitcoin 16k. February 2023, 22k. March, 28k. May, 29k. A little dip thereafter. And in July after the final rate hike hit 30k. And then goes on an absolute tear launching on a moon mission to its all time high of 126k, over the next two years. So here's some more clarity.

Bitcoin doesn't care about rate hikes, so neither should we, as it relates to Bitcoin and crypto at least. The key takeaway here is the bad news got absorbed. Yes, there was a brief shallow dip, and it got bought up. Bitcoin is still in a bullish trend on the weekly. We are still at the very beginning of the bull cycle, and in bull cycles, we stay bullish. And here's yet another healthy dose of clarity for us to be aware of. The start of this bull cycle is playing out almost exactly like the start of the bull cycle back in 2023 So here's the Bitcoin price chart back in 2023 when it flipped bullish around the third week of January. A red week, then after that, we have a rate cut. And as we already discussed from there, it started its two-year journey to 106K. And here's where we are right now.