Leverage Falls Ahead of CLARITY Act Vote and Fed Decision: Bitcoin Price Volatility

Bitcoin's price has been volatile in recent days as leverage falls ahead of two critical events: the CLARITY Act vote and the Federal Reserve decision. The underlying price of Bitcoin declined by around 5% over a 10-day period, but open interest dropped by 13.5%, from 321,497 BTC to 278,151 BTC.

This gap between derivatives unwind and spot price action suggests that traders have deliberately repositioned themselves. Bitcoin's current price trades below $77,000, down from its September 3 high of $82,300 but little changed day over day.

However, the question remains whether the leverage reset has cleared the path to a clean support test at $76,000-$77,000 or simply transferred the burden onto spot demand and ETF flows. The Senate Majority Leader John Thune has scheduled a cloture vote on the CLARITY Act for today, which is critical legislation that could impact the crypto market.