Bitcoin slips, Zcash shines as crypto awaits the Fed

Market overview

The crypto market capitalisation has fallen by 2.3% over the past 24 hours to $2.58T. Of the approximately 40 most actively traded cryptocurrencies, only Zcash has risen over the past 24 hours, gaining 3.8%. The worst performers in our sample were Filecoin (−9.2%), IOTA (−8.8%) and Stellar (−8.6%). 

Bitcoin fell below $75K on Tuesday, hitting a 3.5-week low after the CLARITY Act vote failed in the US Senate, before partially recovering to $75.9K by the start of active trading in Europe. Nevertheless, the price has fallen below the consolidation range, forming a downtrend over the past week and a half. The market lull can easily be attributed to expectations of signals from the Fed later on Wednesday, which have greater potential to influence volatility than the 25-basis-point rate hike already priced in. From a technical analysis perspective, a drop in BTC to $72K does not break the medium-term bullish picture. However, it is likely to flush out a significant portion of marginal short-term long positions from the market. 

Zcash has been the market leader not only over the past 24 hours but also over the past 30 days. It has gained 130%, significantly outperforming its actively traded competitors. An even more remarkable achievement is that this long-standing altcoin is currently trading near the highs it reached in the first weeks after its launch almost 10 years ago, while Bitcoin is down 40%, Ethereum down 52%, and XRP down 65%. 

News background

Short-term Bitcoin holders have been holding onto their profits for almost a month, according to CryptoQuant. In 2022–2023, similar dynamics were observed as the bearish phase of the cycle ended. 

Over the past three weeks, while Bitcoin has hovered around $80K, market sentiment has shifted noticeably. According to Santiment, retail investors' caution has given way to a desire not to miss out on the rally, while larger players have been reducing their positions. Such a divergence in behaviour is often observed near BTC's local highs. 

The US Senate has rejected the CLARITY Act, a bill championed by US President Donald Trump. Fifty out of 100 senators voted against it. A minimum of 60 votes was required to proceed to the next stage of consideration. Now, unless senators schedule a second vote before the November elections, the bill will have to be reintroduced to Congress, and the process will have to start from scratch. 

Democratic members of Congress plan to launch a congressional inquiry into US President Donald Trump and his family's involvement in the cryptocurrency business. The plan could be implemented if the Democrats secure a majority in the House of Representatives following the November midterm elections, according to the Washington Post.

Summary: The crypto market took a hit after the CLARITY Act was rejected, but managed to avoid a sell-off as it awaited the Fed's decision. ZEC is showing strength.