The Federal Reserve’s first rate hike since 2023: Why is Bitcoin rising against the odds? What is the market pricing in?

In the early hours of September 17, 2026 Beijing time, the U.S. Federal Open Market Committee (FOMC) voted unanimously 12-0 to raise the target range for the federal funds rate by 25 basis points to 3.75%-4.00%. This was the Fed’s first rate hike since July 2023, and also the first policy tightening action since Kevin Waush took over as Chair.

Under traditional macro logic, rate hikes lift the risk-free rate and compress valuation headroom for risk assets, so Bitcoin should have faced downward pressure. But the actual price action told a different story. Before the decision was released, Bitcoin briefly dipped to around $75,000. After the decision came out, the price quickly rebounded to above $76,000. As of the Asian trading session on September 17, according to Gate Market Data, Bitcoin was quoted at $76,421.9, up 0.75% over the past 24 hours, with a market cap of roughly $1.52 trillion. An upside surprise like this usually means there are more than one variable in market pricing.

Source: Gate Market Data

The hike itself was already fully priced; the surprise came from the dot plot, not the rate decision

In the interest-rate futures market, the probability of a rate hike before the decision was 92.7%. That means the vast majority of traders had already priced in a 25-basis-point hike in their positions. When a decision has already been fully digested by the market’s "buy the expectation" trade, the price reaction to the hike itself is naturally limited.

The real marginal information came from the Economic Projections (SEP) and the dot plot that were released at the same time. Of the 18 voting members who submitted forecasts, 16 expected at least one more rate hike before year-end, up sharply from 9 in the June meeting. The median policy rate for 2026 was revised up from 3.8% in June to 4.1%. The median rates for 2027 and 2028 were also revised higher by 50 basis points each.

Waush’s remarks at the press conference reinforced this signal. He said inflation "remains elevated," and removed prior wording that attributed high inflation to "supply shocks," instead pointing to how broadly price pressures have spread. The Fed raised its year-end forecast for core PCE to 3.4% and lifted its overall PCE forecast to 3.7%, projecting it would take until 2029 to return to the 2% target—one year later than before.

If you look only at the dot plot, it’s clearly a hawkish outcome. But after the brief dip, Bitcoin didn’t continue to slide. That suggests the market was not only absorbing the hawkish rate path—it was also repricing other variables.

The real drivers that weighed on risk appetite were outside the Fed

The biggest shock for the crypto market this week did not come from the FOMC. On September 15, the U.S. Senate held a procedural vote on the Digital Asset Market Clarity Act (CLARITY Act). The result was 49 votes in favor and 50 against, failing to reach the 60-vote threshold needed to advance the bill. Four Republican senators joined the Democratic side. The disagreement centered on the moral provisions related to federal officials holding crypto assets.

This voting outcome hit crypto markets immediately and was quantifiable. On September 15, spot Bitcoin and Ethereum ETF products recorded total outflows of $592 million, the largest single-day outflow in months. Bitcoin product outflows were about $450 million, while Ethereum product outflows were about $141 million. In the same period, the crypto derivatives market triggered forced liquidations of roughly $670 million over 24 hours, with long positions accounting for $572 million.

XRP was one of the weakest assets in this round of selling. After the Senate vote, it fell nearly 10%, reaching the $1.28 to $1.30 range. That matches its profile as a regulation-sensitive asset. One of the core elements of the CLARITY Act is to clearly define how regulatory jurisdiction for digital assets is divided between the SEC and the CFTC. With the bill stalled, that uncertainty is likely to persist.

After Bitcoin absorbed the dual pressure of ETF outflows and derivatives liquidations on September 15, it still managed to hold around $75,000. One reason is differences in spot-holder structure compared with assets like XRP. Glassnode data shows there was heavy buy concentration around the $75,000 area, making it the key near-term support level.

What the market is pricing: regulatory path risk is gaining weight

If you break down the price action from September 15 to 17, a clearer logic emerges: once the impact of the Fed’s rate hike was absorbed, the marginal pricing power shifted to regulatory developments.

The failure of the CLARITY Act is not the end of the story. In its September 17 comments, Grayscale said that even though the legislative process hit resistance, the SEC and CFTC this year would still be moving ahead with the institutionalization of digital asset regulation through joint interpretive guidance and rule proposals. In other words, the construction of the U.S. crypto regulatory framework would not be halted by the failure of a single bill. Market behavior aligns with this view: Bitcoin’s drop after the bill vote failure was relatively limited, while XRP—with higher regulatory beta—saw a more pronounced downside overshoot.

At the same time, the divergence among top-cap crypto assets also reminds the market that macro tightening is not the only—and not necessarily the most important—pricing variable right now. Zcash (ZEC) broke above $1,200 on September 7. Its seven-day gain exceeded 40%. The driver came from ETF inflows and micro-structure factors tied to short liquidations, with little direct link to the Fed’s rate path.

Gold provides another reference point. Spot gold briefly surged to around $4,360 after the decision, then pulled back to the $4,280 to $4,300 range. This "up first, then back" pattern is similar to Bitcoin. It points to the same behavioral trait: during the event window, the market made rapid position adjustments and took profits, rather than fundamentally reconfiguring direction purely based on the rate decision.

The next real test

The dot plot suggests another rate hike may still be possible this year. However, Waush clearly refused to provide forward guidance, emphasizing that each meeting remains "data dependent." That means the market cannot get definitive answers about the December path from this meeting. Volatility in rate expectations will likely continue to act as background noise for the crypto market.

For crypto, the more meaningful variable may be whether debate over the CLARITY Act resumes before the midterm elections. The Senate Majority Leader has not signaled whether a new procedural vote will be scheduled. If the bill can’t advance before the election, the legislative window would effectively close, and the jurisdiction question for crypto regulation may continue to rely on SEC and CFTC administrative rules to fill the gap.

Bitcoin’s stability around $76,000 sits on a fragile equilibrium: ETF outflows have not reversed, long positions in derivatives were heavily flushed on September 15, and the rate path still looks restrictive. The market’s pricing focus is shifting from "Will the Fed hike again?" to "When will regulatory attribution for crypto assets become clear?" The answer to the latter is more likely to determine the direction of a Bitcoin breakout within the $75,000 to $80,000 range than the next FOMC decision itself.

Conclusion

The Fed’s first rate hike in three years didn’t break Bitcoin. It wasn’t because the market ignored the tightening signal. Instead, tightening was already fully priced. The marginal pressure came from a regulatory event—the CLARITY Act stalling—which the market rapidly digested through ETF outflows and derivatives liquidations. Bitcoin holding the $75,000 support level reflects the tug-of-war between spot-holder structure and regulatory expectations, not a misread of the rate path. The key variable ahead lies in Washington, not in the FOMC meeting room.

FAQ

Q1: Why didn’t the Fed’s rate hike cause Bitcoin to fall?

A 25-basis-point hike was already priced in before the decision, with a probability of 92.7%. The price weakness before the decision completed the necessary position adjustment. After the decision was released, there was no new incremental negative catalyst, so Bitcoin steadied and rebounded near the $75,000 support level. The hawkish effect from the dot plot was partially offset by the regulatory shock from the CLARITY Act stalling.

Q2: How much impact did the CLARITY Act stalling have on Bitcoin?

On September 15, spot Bitcoin and Ethereum ETFs combined for outflows of $592 million, and crypto derivatives cleared about $670 million over 24 hours. But Bitcoin’s decline was smaller than that of regulation-sensitive assets like XRP, suggesting ETF outflows and liquidations were more about short-term position adjustment rather than a systemic repricing tied to the bill failing.

Q3: Where are Bitcoin’s key support and resistance levels right now?

Strong buy concentration near $75,000 forms the primary support. Overhead resistance sits in the $76,500 to $78,000 range. A sustained breakout likely requires either a reversal in the ETF outflow trend or improved expectations around regulation.

Q4: Will the Fed hike again within this year?

The dot plot shows 16 out of 18 members expect at least one more hike before year-end. But Waush explicitly refused to provide forward guidance, stressing data dependence. Whether there will be a hike in December depends on subsequent inflation and employment data, and there is no definite answer available from this meeting alone.

Q5: What should the crypto market focus on next?

The legislative progress of the CLARITY Act is the most important single variable right now. If debate on the bill is restarted before the midterm elections, it could improve market expectations for regulatory certainty. If it continues to be sidelined, the question of regulatory jurisdiction for crypto will rely more on SEC and CFTC administrative rules to move forward, and the market’s pricing focus will keep shifting from macro rates to regulatory policy.