Clarity Act rejection leads to largest Bitcoin capitulation in a month

The rejection of the Clarity Act by the US Senate has triggered a wave of selling pressure among short-term Bitcoin holders. In a single day they sent 23,200 BTC to exchanges at a loss, the largest capitulation in the past month. The Bitcoin price now stands at $75.900, a decline of 2% in 24 hours.

Bitcoin is available at OKX and Bybit.

In brief:

• The Clarity Act failed to secure the required 60 votes and was rejected by 49 votes to 50.
• Short-term holders sent 23,200 BTC to exchanges at a loss, the highest level in a month.
• Regulatory clarity for the US crypto market is now expected to slip to 2027.

Senate rejects Clarity Act by 49 votes to 50

The Clarity Act, a bill intended to provide regulatory clarity for the US crypto market, failed to clear the required threshold of 60 votes. The final vote came in at 49 in favour and 50 against. All Democrats voted against, along with three Republican dissidents: Collins, Hawley and Moran.

Senator Thom Tillis, who initially voted in favour, also switched his vote to against at the last moment. That was part of a procedural step to allow the bill to be brought to a vote again later. Senator Elizabeth Warren, one of the leading opponents of the proposal, urged her colleagues to vote against it shortly before the ballot. The White House had lobbied hard for the bill, but to no avail.

Because senators leave Washington at the start of October ahead of the midterm elections, regulatory clarity for the US crypto market is now expected to slip to 2027.

Panic selling drives short-term holders to exchanges

The political setback immediately caused unrest in the market. The number of BTC that short-term holders sent to exchanges rose from 19,400 to 33,100 BTC in a single day. More than 10,000 of those went to Binance, which remains popular with sellers because of its market depth.

The jump at Kraken stood out. Where a normal day sees roughly 2,000 to 3,000 BTC come in, yesterday that rose to more than 6,000 BTC. Coinbase Advanced recorded 7,300 BTC, a usual level that, according to analyst Darkfost, indicates that large institutional parties did not follow the selling wave.

23,200 BTC sold at a loss: largest capitulation in a month

The most striking figure is that the vast majority of this Bitcoin was offered at a loss. Of the total inflow to exchanges, 23,200 BTC was sold at a loss. That makes this the largest capitulation by short-term holders in the past month, as is also visible in the CryptoQuant chart.

The event shows how sensitive short-term holders are to regulatory news. Bitcoin had previously moved higher on reporting around the Clarity Act, but the final rejection completely reversed that sentiment. With the price at $75.900, many recent buyers are now below their purchase price, which lowers the threshold to sell.