The cryptocurrency market fell 1.65% over the past 24 hours, reducing its total market value to $2.59 trillion on Wednesday as participants await a Federal Reserve decision on interest rates.
Bitcoin traded near $75,000, Ethereum remained below $2,400, and XRP dipped beneath $1.30. The Fear and Greed Index stood at 63, indicating greed despite recent market corrections.
Fed Rate Decision Looms
The Federal Reserve will announce its decision at 2:00 p.m. ET. According to FedWatch data, there is a 92.5% chance of a 25-basis-point rate increase, which would raise the target range from 3.50%-3.75% to 3.75%-4.00%.
Higher interest rates typically put pressure on speculative assets, increase borrowing costs, and make safer assets more attractive to investors.
Regulatory Setback for Crypto Bills
On September 15, the Senate voted 49-50 to reject cloture on the CLARITY Act, which needed 60 votes to advance to full debate. The failure marked a near-term setback for digital asset trading and oversight frameworks.
Policy-sensitive tokens experienced sharper declines during the sell-off. The measure faces reduced chances before the November midterm elections, though House committees continue considering two alternative proposals.
The Digital Asset Tax Certainty Act would exempt crypto transactions and fees of $10 or less from taxation. The American Reserve Modernization Act would establish a strategic Bitcoin reserve of approximately $25 billion in government holdings, held for at least 20 years.
Institutional Flows Weaken
U.S. spot Bitcoin ETFs recorded $450 million in net outflows on Tuesday, led by Fidelity's FBTC with a $215 million outflow. Spot Ethereum ETFs saw $141 million in net outflows.
Bitcoin ETFs have received $1.71 billion in total inflows and hold $1.41 billion in assets under management. XRP ETF trading volume showed minimal activity with approximately $11 million in volume during the latest session.
Market Outlook
Oil prices have moved above $100 per barrel amid Middle East tensions, strengthening arguments for tighter monetary policy. Analysts identify key support levels: Bitcoin at $75,000, Ethereum at $2,400, and XRP at $1.30. A dovish Fed outcome could support rebounds, while a rate increase paired with hawkish guidance may extend losses and increase volatility.
