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Bitcoin Surges Past $87,000 After CLARITY Act Failure: 3 Reasons Why

Published 25 September 2026
Dr. Guneet Kaur
Authors

Key Takeaways

  • Bitcoin surged from below $75,000 to an intraday high near $87,400 in less than a week, even after the Senate failed to advance the CLARITY Act and the Federal Reserve raised rates.
  • Nearly $1 billion poured into US spot Bitcoin ETFs on Sept. 21, providing real spot demand as BTC broke through resistance.
  • The breakout then forced hundreds of millions of dollars in bearish positions to close, turning the rally into a powerful short squeeze.

Bitcoin was handed two pieces of news that would ordinarily make crypto bulls nervous. Instead, BTC exploded by more than $12,000.

The Senate failed to advance the CLARITY Act on Sept. 15, delaying legislation designed to establish a clearer structure for the US digital asset market. One day later, the Federal Reserve unanimously raised interest rates by 25 basis points, taking its target range to 3.75% to 4%.

Yet Bitcoin went in the opposite direction.

BTC climbed from roughly $75,000 around the two events to an intraday high near $87,400 on Sept. 21, an increase of about 17% in less than a week.

So what overpowered two apparent bearish catalysts?

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1. Bad News May Have Already Been Priced In

The first explanation is counterintuitive: Bitcoin may have rallied because the feared events finally happened.

Nexo analyst Iliya Kalchev noted that Bitcoin absorbed the Fed hike, the CLARITY Act setback, and a Bank of Japan rate increase without falling meaningfully below $75,000.

HashKey researcher Tim Sun argued that much of the de-risking occurred before the Fed decision and Senate vote, creating something resembling a “sell the rumor, buy the news” setup.

The Fed’s decision also removed one source of uncertainty. Markets knew rates were going higher. Once the increase was confirmed, investors could trade the new reality rather than speculate about the decision.

That does not mean the macro threat disappeared. The Fed’s September projections removed some of the easing markets had previously expected, leaving higher rates as a continuing headwind for risk assets.

2. Almost $1B Flooded Into Bitcoin ETFs in One Day

Then came something measurable: buyers.

US spot Bitcoin ETFs attracted approximately $999 million in net inflows on Sept. 21, their strongest daily haul in nearly a year. BlackRock’s IBIT alone collected roughly $381 million, while ARKB took in $289 million and Fidelity’s FBTC around $239 million.

That matters because the rally was not solely a move in leveraged derivatives. Fresh capital was flowing into spot Bitcoin products as BTC tested resistance.

ETF buying continued after the initial breakout. US Bitcoin funds accumulated roughly $2 billion over the week, even as BTC subsequently struggled to remain above $87,000.

Bitcoin also reclaimed the average cost basis of US spot ETF investors, estimated at around $82,225, for the first time since January.

3. Bitcoin’s Breakout Turned Into a Short-Seller Trap

The final acceleration came from traders betting Bitcoin would fall.

Once BTC cleared the $82,000 resistance level, leveraged short positions began to be liquidated. Exchanges automatically buy assets to close underwater shorts, which can lead to additional forced buying as prices rise.

At one point on Sept. 21, more than $300 million of shorts were liquidated in a single hour. Bitcoin accounted for roughly $226 million of those liquidations.

Across the wider move, more than $800 million in forced short liquidations helped propel Bitcoin through successive resistance levels toward $87,400.

That also explains why the rally happened so quickly.

The CLARITY Act setback did not suddenly make Bitcoin bullish. Instead, the market absorbed the regulatory disappointment and the Fed hike without collapsing.

ETF buyers then returned aggressively, and once Bitcoin broke resistance, short sellers became involuntary buyers.

Bitcoin’s retreat below $85,000 since the peak leaves the next question unanswered: was $87,400 the end of a squeeze, or the beginning of a larger breakout?

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Disclaimer: The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Dr. Guneet Kaur

Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.

Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.

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