Ethereum fell about 3% over the past week after the Clarity Act failed to clear the Senate, resetting expectations that the legislation would provide a major catalyst for the second-largest cryptocurrency. ETH dropped to $2,388 after the vote before rebounding to $2,400, while XRP and Hyperliquid each declined more than 8%. US-listed spot Ethereum funds recorded their largest outflow since January on Tuesday as the bill stalled. Selling had begun before the vote, and CryptoQuant recorded roughly 709,400 ETH flowing into Binance on September 11, the highest daily total since June, although deposits do not prove that the coins were sold. Longer-term supply indicators remain supportive: exchange reserves stand at 14.6 million ETH, the lowest level since 2016, while analyst Leon Waidmann said 43 million ETH is staked, a record amount representing close to 35% of supply. Analyst MorenoDV said ETH’s MVRV ratio has stayed above 1 for several sessions and that the token trades above its realized price near $2,300, conditions he said would support the view that June–July marked the cycle low and the market is moving from repair into expansion. Demand signals are less clear, with CryptoQuant’s Coinbase Premium Index near -0.08, indicating weaker U.S. spot demand than offshore demand. Grayscale’s head of research said crypto can advance without the Clarity Act, shifting attention toward macroeconomic conditions. The Federal Reserve increased interest rates on Wednesday, while Kevin Warsh warned that further tightening could be ahead. Traders are now focused on whether the hike was a one-time move or a sign of additional increases. Analyst Ted Pillows said a one-time hike could produce a strong rally, while greater emphasis on the Fed’s 2% inflation target could trigger declines in stocks, crypto and precious metals alongside higher bond yields.