It was a week ago when the US CPI data had already come out, and the Fed had all the necessary puzzle pieces before its key FOMC meeting. Investors turned their attention to BTC, not only because of the US central bank’s actions, but also due to the CLARITY Act vote in the US Senate, as well as the potential rate hike in Japan on September 18.

All of those events have now passed. And none of them went positively for BTC. The CLARITY Act set the stage with a failed vote to proceed on Tuesday, followed by the Fed’s first rate increase in over three years, and the Bank of Japan followed with another hike to a 31-year high.

Despite all these setbacks, bitcoin actually holds strong.

BTC Should Have Been Hurt by Now

We are not saying that the cryptocurrency didn’t feel any pain last week. Just the opposite; it dipped to a multi-week low of $75,000 after the CLARITY Act’s failure to advance in the US Senate. This came after it was rejected at $80,000 a day earlier. So, a $5,000 drop in 24 hours is not nothing. But shouldn’t it be even worse?

More than 23,000 BTC were sent to exchanges at a loss following the vote, which CQ described as a major capitulation event. Then, the US central bank raised its target range by 25 basis points to 3.75%-4%, its first such move since July 2023. Yet, that could have been priced in before the meeting itself, but policymakers maintained a hawkish stance as inflation remains elevated, keeping another increase later this year firmly on the table.

This is not the environment BTC bulls hope for. Higher rates strengthen the competition for yielding assets, tighten financial conditions, and tend to support the greenback.

The Bank of Japan nailed the last nail in bitcoin’s expected coffin on Friday, lifting the rates by 25 bps to 1.25%: the highest level in 31 years. Japan has provided some of the world’s cheapest funding for decades, meaning tighter policy has broader implications for global liquidity and carry trades.

Three significant negative developments. Three opportunities for BTC to fall apart. And yes, it did so briefly to $75,000, but that was all. Since then, it has rebounded to over $78,000, erasing much of the weekly losses.

Bad News Is Not Working Anymore?

This is perhaps the most interesting part. When the CLARITY Act failed, BTC slipped to $75,000. When the Fed raised the rates, BTC actually rallied. By Friday, the cryptocurrency had crossed $81,000, and the BOJ’s decision was shrugged off.

Crypto Dan argued that the on-chain picture increasingly resembles previous transitions out of bear markets. Bitwise CIO Matt Hougan noted that the cryptocurrency had already gained substantially while prediction markets were simultaneously cutting the odds of CLARITY advancing, suggesting the recent recovery was never entirely dependent on the bill.

The less dramatic explanation is that the Fed hike was overwhelmingly priced in beforehand, markets expected the CLARITY Act to fail, and the BOJ’s move didn’t benefit the yen immediately, which weakened after the announcement.

In other words, some of the week’s supposedly massive shocks weren’t really shocks to most. Nevertheless, resilience matters.

Despite the rebound, BTC still has a long way to go before we can determine that the bull market has begun. The first major test lies in defending $80,000, followed by taking down $81,700. Only after bitcoin reclaims those decisively can we talk about another bull phase.

Source: CryptoPotato