The crypto market is going through a sharp correction after the US Senate failed to advance the much-anticipated CLARITY Act. Bitcoin has also pulled back, fueling concerns that further downside remains possible.
According to CoinGecko data, BTC is down 2.1% over the past 24 hours, 4.1% over the past week, and 2.1% over the last 14 days. Despite the recent weakness, Bitcoin remains up 19.5% over the past month.
The CLARITY Act setback is one factor weighing on sentiment, but macroeconomic conditions could create additional pressure.
What Could Pressure Crypto Next?
The CLARITY Act was designed to establish clearer rules for the crypto industry and support the administration’s broader pro-crypto policy direction. The bill also included ethics-related provisions affecting President Trump’s crypto interests, but the proposed changes were not enough to secure passage.
The political setback could make some investors more cautious toward digital assets, particularly while broader market confidence remains weak.
Interest-rate expectations are another factor to watch. Federal Reserve Chair Kevin Warsh took a hawkish tone during his Jackson Hole speech, pointing to persistent inflation concerns. Weak August jobs data added another layer of uncertainty around the Fed’s next move.
If borrowing costs remain high or rates move higher, liquidity could move away from riskier assets such as cryptocurrencies and toward more defensive investments.
What Comes Next?
Investor risk appetite remains subdued, while the broader economy continues to face uncertainty. Under these conditions, some capital could shift toward traditional safe-haven assets such as gold.
Still, the outlook for Bitcoin remains a subject of debate. Bernstein has projected that BTC could return to the $100,000 level by the end of 2026. If that target is reached, renewed momentum could potentially bring fresh attention and liquidity into the wider crypto market.
For now, both crypto-specific regulation and broader macroeconomic developments remain important factors to watch.
