Bitcoin stalls – STHs dump BTC at a loss following failed Senate crypto bill

On Tuesday, the 15th of September, the Senate voted to block the CLARITY Act from passing, pushing regulatory clarity back to 2027. Bitcoin [$BTC] reacted bearishly to this news, as it adds uncertainty to the crypto markets.

Democrats had withheld support. They argued that the final draft did not do enough to protect against conflicts of interest, such as President Trump, his family, and the crypto business ventures of the Trump family.

Republicans had put forth a revised draft, which included a new ethics division, safeguards around stablecoin rewards, and developer protection.

Short-term Bitcoin holders reacted in panic

Crypto analyst Darkfost noted that short-term holders reacted badly to the CLARITY Act vote. Their panic saw the daily exchange inflows from STHs rise from 19.4k $BTC to 33.1k $BTC.

Most these coins were moved at a loss. Tuesday’s price move below $76k resulted in 23.2k $BTC sent to exchanges at a loss, the largest in the past month.

The 30-day exchange net taker volume has fallen into negative territory, with a reading of -87.8k $BTC at the time of writing.

The rising bearish aggression in Bitcoin markets was a worry. The last time the 30-day taker volumes were this negative was in early June, when $BTC saw a sharp correction to $60,000.

Elevated Open Interest and funding show a mild long bias

The FOMC rate decision is set for Wednesday, the 16th of September. The FedWatch Tool showed a 92.5% probability of a rate hike to 375-400 bps.

The sell-off over the past two weeks saw the price reset from $82k to below $76k. It can be argued that the market was pricing in the increasing odds of a rate hike.

The Open Interest has risen from $25 billion to $25.4 billion since the 11th of September. Funding rates were also positive, showing a mild long bias in the derivatives market. This short-term bullish bias likely lacks conviction.

Thrice since the 9th of September, Bitcoin has rallied to test the $79k-$80k area. It has been beaten back each time. Moreover, the $76,264 swing low from early September has been breached.

The H4 market structure has flipped bearishly. An influx of steady demand following the rate decision news and subsequent volatility is needed to keep the August rally going.

If this does not materialize, the structure shift implies a bearish $BTC bias for the coming days.

Final Summary

• The CLARITY Act vote was blocked in the Senate despite the revised ethics division and other provisions presented in the final draft.
• Short-term holders, likely spooked by the news and the looming rate decision, moved 23.2k $BTC to exchanges at a loss in 24 hours.