Crypto Market Implodes on CLARITY Act Failure, Interest Rate Hike Expectations
Leading cryptocurrencies plummeted on Tuesday in response to the failure of the CLARITY Act in the Senate and growing expectations of an interest-rate hike.
The act, which aimed to provide more regulatory clarity for digital assets, fell short of the 60 votes needed to advance. Bitcoin sank below $74,000, while Ethereum dived below $2,400. XRP and Dogecoin plummeted sharply.
According to Coinglass data, over $660 million was erased in cryptocurrency liquidations in the past 24 hours, with $566 million coming from bullish long positions. Bitcoin's open interest fell 0.72% over the last 24 hours, but retail and whale derivatives traders increased their long exposure to BTC after the dip.
Cryptocurrency-related stocks also bled, with Strategy Inc. (NASDAQ:MSTR) and Bitmine Immersion Technologies Inc. (NYSE:BMNR) closing down 5.36% and 8.39%, respectively. The market sentiment shifted from “Greed” to “Neutral,” according to the Crypto Fear & Greed Index.
Ali Martinez, a widely followed cryptocurrency analyst, said that Bitcoin’s short-term holder cost basis, the estimated average price paid for BTC by investors who have held their coins for less than 155 days, has historically provided “attractive accumulation zones.” Martinez is waiting for a pullback to the level around $71,200 before buying BTC again.
Michaël van de Poppe expressed growing interest in the $74,000 zone as his preferred support area. 'Sweep of the lows done, fear is in the markets, and we most likely get a ton of short liquidity in the markets now too,' he added.