Crypto: No breakthrough without CLARITY

Market overview

The crypto market rose to $2.71T, touching the highs seen in the second half of last week, but retreated fairly quickly to a comfortable $2.65T. The volatility can be linked to news headlines about the CLARITY Act and its rapid progress, while the pullback can be attributed to a return to the status quo after the Democrats tabled a 'counterproposal' just a few hours before the final vote. This act should clarify the future of crypto in the US; without it, it remains in the fog. Prediction markets put the chances of the bill passing by the end of the year at 19%, roughly the same as last week, after a spike to 34% on Monday. It appears the market is getting used to life without this legislation, though this has not prevented trading at levels seen in May, when the chances of the bill passing by the end of the year exceeded 75%. Among the top cryptocurrencies, the past day has seen mixed performance, with declines predominating; the biggest gains were recorded by Uniswap (+5.6%), Stellar (+5.5%) and XRP (+1.6%), while the biggest losses were suffered by Filecoin (−10.7%), Internet Computer (−6.9%) and Tezos (−6.3%).

Bitcoin rose towards $79.6K at the end of the day on Monday, before coming under steady selling pressure, pushing the price back down to $77.4K and once again placing it at the lower boundary of its consolidation range. The leading cryptocurrency needs a significant catalyst to push the price out of this range; thereafter, the liquidation of margin positions could trigger further upward or downward movement. The longer the asset remains within the range, the higher the margin positions become, and the closer stop-loss orders move towards the price, triggering avalanche-like movements. In the current BTC market, a significant increase in volatility could occur if the price breaks below $75K or above $82K. Within this range, a margin of more than 9% provides sufficient scope for short-term trading, but movements here may still be subject to excessive noise.   

News background

Spot demand for Bitcoin remains weak, meaning the recent rally lacks solid fundamental support, according to CryptoQuant. The current market situation is reminiscent of the period from January to March, when derivatives primarily drove BTC.

Last week, BitMine purchased an additional 27,180 ETH, bringing the total amount of Ethereum in its reserves to 5.96 million ETH at an average price of $2.51K. The main drivers of Ethereum's growth are expected to be the tokenisation of assets on the ETH blockchain and the development of AI agents, said the company's Chairman, Tom Lee. 

Attorneys general from 18 US states have called on the Senate to reject the CLARITY Act in its current form. In their view, the bill restricts state authorities' oversight of cryptocurrencies, which is needed to protect investors from fraud in the sector. 

The crypto market's attention is now focused on the procedural vote on the CLARITY Act on September 15th and the Federal Reserve's meeting on the key interest rate on September 16th. 

In the event of a protracted 20% correction in the S&P 500 index, the leading cryptocurrency will plummet to its long-term support level around $10K, Bloomberg Intelligence senior strategist Mike McGlone reiterated, pointing to the emergence of three sell signals. 

Summary: The crypto market awaits the CLARITY Act debates and the Fed’s interest rate decision; BTC remains within the $75K–$82K range, where a breakout could sharply increase volatility.