Bitcoin fell 1.7% to $76,862 since midnight UTC, reversing Monday’s gains as the chances of the CLARITY Act becoming law this year dropped sharply on Polymarket.
The leading cryptocurrency had climbed from $75,916.49 to $79,427 on Monday before surrendering those gains on Tuesday. At $76,862, bitcoin was 6.6% below its September high of $82,284, set on Sept. 4. Ether declined 1.6% to $2,474.76, while solana dropped 2% to $100.43.
Polymarket’s odds for the CLARITY Act followed a similar path. The probability of the bill being signed into law this year reached 34% Monday but fell to 17% afterward. The decline came after Democrats reportedly developed a counterproposal following their rejection of a revised Republican draft circulated Sunday.
The main disagreement involves ethics provisions covering officials’ cryptocurrency holdings rather than the bill’s central market-structure provisions.
The Senate is scheduled to vote at 2:15 p.m. ET on whether to invoke cloture and force the legislation forward. The procedural step requires 60 votes. Passage would bring the crypto industry closer to its first comprehensive U.S. framework for determining regulatory jurisdiction over digital assets. If lawmakers fail to advance the bill, broader market-structure legislation could be delayed until after November’s midterm elections.
The downturn was widespread across digital assets, with 92 of the CoinDesk 100 constituents posting losses. The index declined 1.6% overall.
Stocks Move Higher While Crypto Retreats
Traditional markets showed a different trend Tuesday. Nasdaq 100 futures rose 0.43%, while S&P 500 futures advanced 0.35% as investors recovered some of Monday’s losses tied to artificial intelligence stocks.
The Dollar Index added 0.17%, further highlighting the divergence between crypto and other major markets. The move reversed the previous day’s setup, when cryptocurrencies had been the only major asset class trading higher.
Derivatives Point to Cautious Positioning
Crypto futures traders showed limited conviction ahead of the Senate vote, with long and short taker activity remaining closely balanced.
Aggregate open interest fell 1% over 24 hours to $135 billion, while futures trading volume jumped 54% to $207 billion. The combination indicates that existing traders are closing positions faster than new ones are being opened.
Marex analysts noted that bitcoin’s overnight decline toward $77,000 was accompanied by taker selling in futures. Takers execute trades at available prices and therefore remove liquidity from exchange order books.
Bitcoin futures open interest remained below 680,000 BTC, suggesting weak demand for leveraged exposure.
Open interest was also declining in ether, solana and XRP futures. Solana’s open interest stood at 58.81 million tokens, its lowest level since May, according to CoinGlass.
The 24-hour open-interest-adjusted cumulative volume delta for major tokens remained negative, signaling bearish pressure. The reading indicates that a growing share of short-side trading is being executed through market orders rather than passive limit orders.
XLM Outperforms
Stellar’s XLM stood out from the broader market decline. Its spot price was up 4% over 24 hours, while futures open interest increased more than 10% to 1 billion XLM.
The combination of higher prices and rising open interest is typically viewed as evidence of long accumulation. Annualized funding rates around 10% also indicated healthy demand for bullish exposure without obvious signs of overheating.
Funding rates remained moderately positive for most major cryptocurrencies, including bitcoin. Ether and SOL posted mildly negative readings, suggesting a small bias toward short positions.
That short positioning could potentially fuel a squeeze if the CLARITY Act vote produces a favorable outcome. TRX remained an exception, with deeply negative open interest continuing to weigh on its derivatives positioning.
Options Traders Prepare for Volatility
Bitcoin’s and ether’s 30-day implied-volatility indexes, BVIV and EVIV, moved higher but remained close to recent levels and well below their February and June peaks.
The increase indicates a modest rise in hedging demand as traders prepare for the potential market impact of the Senate vote.
On Deribit, the implied-volatility curve remained normal and upward sloping, suggesting traders were expecting relatively orderly conditions over the next 24 hours rather than a major volatility spike.
Higher-strike calls also accounted for most of the top-five bitcoin options by 24-hour volume, with ether showing a similar pattern.
Filecoin Reverses Sharp Rally
Filecoin (FIL) gave back part of Monday’s gains after a 27% rally coincided with a 70% jump in futures open interest.
The token fell 5.1% since midnight UTC to $0.89 and was down 13% over 24 hours. Its open interest also declined 23% to $106 million.
AI and computing-related cryptocurrencies remained under pressure for a second consecutive session following Anthropic CEO Dario Amodei’s weekend call for slower AI development.
Internet Computer (ICP) fell 6% to $2.58, while Theta Network dropped 4.5% and NEAR Protocol declined 3.7%.
Uniswap (UNI) bucked the broader DeFi weakness, gaining 1% to $6.60 and rising 4.8% over 24 hours. The token is among the assets viewed as having greater exposure to Tuesday’s legislative vote.
Venice Token (VVV) declined another 4.5% to $22.05 after retracing about 20% from last Wednesday’s record high. The earlier rally was driven largely by a token burn and short covering rather than sustained buying.
The two leading privacy-focused tokens continued to diverge for a fifth straight session. Monero (XMR) gained 0.37% to $516.41, while Zcash (ZEC) fell 1.87% to $1,141.
Cosmos (ATOM) and XDC Network (XDC) each advanced 1.4%. XLM was nearly unchanged on the day but remained 4.3% higher over the past 24 hours.
CoinMarketCap’s Altcoin Season Index stood at 36 out of 100, keeping the market in neutral territory after the reading fell from 51 last week.
