Crypto Falls After Clarity Act Stalls

What just hit crypto

Pressure picked up midweek after senators did not move the Clarity Act forward on Tuesday, denting hopes for long awaited market-structure rules. After more than a year of debate, the measure was considered unlikely to pass given partisan tensions in the Senate this week. Traders had pinned some optimism on the bill as a way to break an 11 month rut in digital assets.

At the same time, inflation concerns and surging Treasury yields have traders expecting Warsh to raise rates on Wednesday, a backdrop that usually dampens appetite for Bitcoin and other risk assets. The coin steadied near $75,900 early in New York after Tuesday's drop, and the broader market was still reeling from the prior day's declines.

Flows, positioning, and the unwind

Coinglass data showed that more than $540 million of bullish cryptocurrency wagers were unwound over the past 24 hours. Institutional interest also faded, with US-listed spot Bitcoin ETFs recorded net outflows topping $450 million on Tuesday, marking the largest one-day withdrawal since June.

Positioning still shows some backbone. On Deribit, there are more upside bets than downside ones on Bitcoin, including roughly $1.7 billion in calls clustered at the $80,000 strike across expiries.