Bitcoin has entered a period of heightened volatility as it trades below a key weekly support level, with a procedural vote on the U.S. Senate’s Clarity Act and a Federal Reserve rate decision both approaching.

Cointelegraph reported on Sept. 14 local time that the market sees the Sept. 16 Clarity Act vote and the Fed’s benchmark rate announcement on Sept. 17 as this week’s biggest variables.

The key point is that regulation and monetary policy could rattle market sentiment in quick succession. Bitcoin began the third week of September below a major weekly support level. The Fed is widely expected to raise its benchmark rate by 25 basis points to 3.75 to 4%, reflecting recent inflation and pressure from rising oil prices linked to the Middle East. CME Group’s FedWatch showed the probability of rates being held unchanged had fallen to 13.3% at the time of writing.

Oil is also adding to market anxiety. The Kobeissi Letter warned that disruptions could hit the Strait of Hormuz, Saudi Arabia’s East-West pipeline and the Bab el-Mandeb Strait, potentially blocking transport of 30 million barrels a day. It said the potential shock would be very large given the global oil market is about 100 million barrels a day. U.S. consumers’ one-year inflation expectations have also risen to 4.6%.

The cryptocurrency market must first digest the Clarity Act vote a day before the Fed announcement. U.S. Senate Republicans presented a revised version as the final draft, and the bill is part of a bipartisan negotiation to provide the industry with a clearer legal framework. Senator Cynthia Lummis disclosed the 635-page revision, saying, "After a year of intense bipartisan negotiations, this bill is ready."

The Clarity Act faces a procedural vote on Sept. 16, and it needs 60 votes to move to the floor debate stage. The result could trigger sharp short-term moves. Lummis argued, "If it fails, it is opposition to meaningful ethics reform on politicians’ personal investments, handing digital asset leadership to foreign competitors, and leaving Americans in a market with no safeguards."

Expectations for passage have risen, but the market’s assessment of the chances of completing legislation remains cautious. Polymarket users put the probability of the Clarity Act receiving final sign-off in 2026 at 34%. Tyler Williams, a former crypto adviser to U.S. Treasury Secretary Scott Bessent, said in a podcast interview, "The odds are higher than ever," adding, "We are right before the point where this becomes actual law."

Market positioning has already shifted toward reducing risk. Santiment said, based on changes in open interest across exchanges, that the market is bracing for volatility ahead of the two events. "Everyone is watching Tuesday’s vote and Wednesday’s Fed," Santiment said. "Positioning data show the market has already moved first." The figure converting dollar-denominated open interest into bitcoin fell 13.5% to 278,151 BTC from 321,497 BTC in the week through Sept. 11. Spot prices fell 5% over the same period.

Derivatives market sentiment, however, has not fully broken. CryptoQuant said funding rates across exchanges have been gradually rising since late May, lifting bullish sentiment. It said that after a period of extreme pessimism in Binance’s derivatives market, short-position accumulation became fuel for May’s rebound. It added that such a pessimistic consensus has repeatedly appeared toward the end of each bitcoin correction.

Price action remains unsettled. Bitcoin fell to about $76,800 on the weekly close, failing to defend a key support level. Rekt Capital said bitcoin needed to hold $78,300 on a weekly closing basis, but warned that dropping below it could repeat a breakout failure seen in early May. Bitcoin also closed below its 50-week exponential moving average of $77,380. That level is cited as a benchmark needed to confirm a trend reversal. Rekt Capital put the next line of defense at the 21-week exponential moving average of $72,270.

This week’s bitcoin market is facing regulatory uncertainty, interest-rate variables and a breach of technical support levels all at once. With the Senate vote and the Fed decision coming one after the other, the short-term price direction is increasingly likely to swing sharply in response.