Bitcoin Faces Volatility Test as Fed Decision and CLARITY Act Vote Approach

Bitcoin is entering the third week of September under pressure, with the cryptocurrency trading below several important weekly support levels as markets prepare for two major US events.

The Federal Reserve’s latest interest-rate decision on Wednesday is expected to be the biggest near-term driver for risk assets. Markets are currently pricing in a strong chance of a 25-basis-point rate hike, which would take the benchmark range to 3.75%-4%.

Expectations have shifted sharply over the past week. The probability of the Fed keeping rates unchanged was above 40% a week ago but has since fallen to around 13%. Higher inflation concerns and rising oil prices have pushed traders toward a more hawkish outlook.

Recent US inflation data did not deliver major upside surprises, but markets remain concerned about the impact of higher energy costs. Oil prices have moved above $100 per barrel as tensions in the Middle East threaten key supply routes.

The potential disruption to global energy flows has also increased concerns about future inflation. US consumers now expect prices to rise 4.6% over the next year, up significantly from the start of 2026, with fuel costs and tariffs among the main concerns.

The crypto market faces another major event one day before the Fed decision.

On Tuesday, the US Senate is scheduled to hold a procedural vote on the latest version of the CLARITY Act. The legislation is designed to establish clearer rules for digital assets in the United States following months of bipartisan negotiations.

Senate Republicans released a 635-page version of the proposal on Monday, describing it as their final offer. The bill must secure 60 votes in the procedural stage before moving toward a full Senate debate.

The outcome could create short-term volatility across crypto markets. Prediction markets currently place the probability of the bill becoming law during 2026 at around 34%, showing that traders remain uncertain about its chances.

Market positioning suggests traders are already reducing exposure ahead of the two events.

Bitcoin futures open interest, measured in BTC terms, dropped 13.5% during the week through Sept. 11, falling from roughly 321,500 BTC to 278,150 BTC. Open interest has recovered slightly since then, while Bitcoin itself has declined about 5%.

Current positioning is also around 20% below the level seen before Bitcoin's mid-August rally, pointing to a more cautious derivatives market.

Funding rates, however, continue to show some bullish sentiment. Aggregate funding rates across major exchanges have gradually increased since the end of May after spending much of March and April in negative territory.

Historically, extended periods of negative funding have appeared near the later stages of major Bitcoin corrections. A buildup of short positions can also create conditions for sharp rallies when traders are forced to close bearish bets.

Bitcoin's latest price action remains less encouraging. BTC finished Sunday's weekly session near $76,800 after failing to hold the $78,300 area that had emerged as an important support level.

The cryptocurrency also closed below its 50-week exponential moving average near $77,380. The 21-week EMA around $72,270 now represents another important level for bulls to defend.

A sustained move below these averages could reinforce concerns that Bitcoin has not yet entered a confirmed full bull-market phase.

There is one positive technical signal: Bitcoin's weekly relative strength index continues to form higher lows, creating a bullish divergence that has remained in place through 2026.

With the CLARITY Act vote arriving Tuesday and the Fed decision following Wednesday, Bitcoin traders are likely to face a sharp increase in volatility before the market gets a clearer direction.