Santiment says crypto sentiment turns neutral after Clarity Act setback, Fed rate hike

Crypto market sentiment has cooled to near-neutral levels after the Clarity Act failed to advance in the Senate and the Federal Reserve raised interest rates, according to on-chain analytics platform Santiment. Santiment said extreme FOMO spread across the crypto market on Sept. 14, when traders increased positions on expectations the Clarity Act would pass in a market-friendly direction, rapidly fueling bullish sentiment. Santiment added that regardless of the eventual outcome, the optimism and overheated mood dominating the market were themselves a warning sign. After the Senate failed to move the Clarity Act forward on Sept. 15, investors who bought amid the FOMO were hit by declines, Santiment said. The platform added that another risk-off factor emerged on Sept. 16 when the Fed raised its benchmark rate. Following those events, market sentiment is now close to neutral, with a healthier environment for taking on additional risk than earlier this week, Santiment said. It added that much of the excessive optimism and heat has faded, fear is starting to reappear, and the market needs close monitoring.