ETH faces critical $2,370 test as CLARITY Act fails and Fed decision approaches
The market has already received one unpleasant surprise from Washington, but the biggest test of the week is still ahead. For Ethereum, the question is no longer just what the Fed does with rates, but what will drive risk once the decision is out.
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The U.S. Senate declined to move forward with the CLARITY Act after a procedural vote revealed the bill didn't garner enough support. A significant obstacle for the bill was a limit on the financial interests of government officials and their families. Republicans proposed a new version of the bill but it failed to make it over the line.
The market reaction was almost immediate, with Ethereum falling more than 6% at one point following the vote.
$2,370 becomes the critical support for Ethereum
ETH has started to play out the scenario outlined earlier. Following the CLARITY Act news, the price fell sharply toward key support around $2,370, although buyers have so far managed to defend the level.The Fed decision could trigger another sharp rise in volatility, keeping the risk of a deeper decline toward $2,200 relevant over the coming days.
The 50-day SMA is currently located near that area, while a sustained break below $2,370 would provide additional confirmation of the bearish setup.
The structure would turn less bearish only if ETH reclaims $2,600 and holds above it for at least one full trading day. Until then, downside pressure remains the main technical risk.
Oil may matter more than the rate hike itself
Markets are now pricing in a 25-basis-point Fed rate hike with near certainty, with CME FedWatch putting the probability at roughly 95%. The move itself is therefore already largely reflected in market expectations.
That is why an unexpected pause could potentially trigger a stronger reaction than the anticipated hike. Investors would have to quickly reassess both the reasoning behind such a decision and the Fed’s confidence in its inflation-fighting stance. Warsh is also known for a cautious approach to forward guidance, meaning markets may not receive a clear roadmap for the next policy steps even after the meeting.
A more persistent risk is coming from the energy market. WTI has climbed to around $105.83, while Brent is near $108.75 amid continued supply disruptions in the Middle East. As long as oil remains around $105–108, inflation pressure and elevated bond yields are likely to keep limiting the scope for easier financial conditions.
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