Litecoin Tumbles Amid Broad Crypto Selloff Triggered by US Senate's CLARITY Act Defeat

The crypto market experienced a broad selloff after the US Senate failed to advance the CLARITY Act, which led to increased fears of a Federal Reserve rate hike and tighter financial conditions.

This macro-driven correction caused Litecoin (LTC) to drop approximately 3.5% over the last 25 hours, but experts say it's not a coin-specific shock.

The US Digital Asset Market CLARITY Act's failure led to a sharp crypto-wide selloff, with Bitcoin falling around 3-5%, Ethereum dropping 4-7%, and Solana declining 5-6%.

Derivatives liquidations and ETF outflows also contributed to the selloff, with exchanges liquidating $571 million of bullish futures positions and spot Bitcoin ETFs in the US recording about $450 million of net outflows in one day.