Bitcoin (CRYPTO:BTC) surged 14% to $86,291, a sharp increase from its September 15 close of $75,584. The rally occurred despite the U.S. Senate rejecting the CLARITY Act and the Federal Reserve raising interest rates.
The Senate voted down the CLARITY Act 49 to 50 on September 15, with all Democrats and four Republicans opposing the bill. The vote killed the legislation for the year, as it required 60 votes to advance. The following day, the Federal Reserve raised its target interest rate by a quarter percentage point, marking the first increase since 2023. Fed Chair Kevin Warsh stated he was not in the forward guidance business and opted out of submitting a rate forecast, while other projections indicated one or two more hikes by year-end.
Jesse Marre, a senior portfolio manager at Hilbert Group, suggested these events were anticipated, explaining why Bitcoin dipped below $75,000 before recovering. The asset closed above its 50-week moving average for the first time in nearly a year on September 20. Marre identified $75,000 as strong support, which held despite intraday dips to $74,888 and $74,912 on September 15 and 16.
Regulatory activity continued independently of Congress in the days following the vote. The SEC issued its Innovation Exemption, while the CFTC forwarded a proposed rule to the White House for review. Gadi Chait of Xapo Bank viewed these steps as regulators moving forward without congressional approval, whereas Marre cautioned that executive rules are easier for future administrations to reverse than enacted laws.
U.S. spot Bitcoin ETFs recorded $999 million in inflows on September 21, the highest one-day amount since October 2025. This inflow reversed earlier outflows of $450 million and $296 million on September 15 and 16. BlackRock's IBIT, ARK's ARKB, and Fidelity's FBTC were major contributors. These funds now hold approximately 6.3% of all Bitcoin.
Marre views the strong follow-through as the start of a new bull market, targeting a range of $95,000 to $100,000. This level is 10% to 16% above the current price. Chait emphasized that reclaiming the 50-week average marks a significant trend shift. The previous record of $126,198, set on October 6, 2025, remains 46% above the current level.
The rally faces potential headwinds from Treasury yields and geopolitical events. The 10-year yield reached 5.01%, its highest level in a year, before dropping to 4.94% on September 17 and rebounding. Marre noted that Treasury market moves have impacted Bitcoin more than Fed actions because Bitcoin does not pay interest. A meeting between Donald Trump and Xi Jinping is scheduled for September 24.
A daily close below $75,000 would signal a warning, as that level has held twice recently. If the 10-year yield surpasses 5.01% before the September 24 meeting, a pullback could occur before Bitcoin reaches its next target.