Key Takeaways
- Bitcoin’s price touched $77,000 on Thursday, recovering from a monthly low after the FOMC raised interest rates by 25 bps.
- The sudden price shift forced over $260 million in short liquidations across the broader crypto market.
- Failure of the Senate’s CLARITY Act vote leaves protocols like Curve Finance facing regulatory uncertainty in DeFi.
Market Recovery and Price Action
Bitcoin’s price showed signs of recovery Thursday after briefly touching $77,000, snapping a downward trend that pushed it to a monthly low less than 24 hours earlier. The slump began with stalled progress on the Senate’s CLARITY Act, with added pressure after the Federal Open Market Committee (FOMC) unanimously voted Wednesday to raise interest rates by 25 basis points.
According to Bitstamp data, bitcoin’s price initially traded sideways, with $76,000 acting as immediate resistance. However, the trajectory shifted after 7 p.m. Wednesday as $76,000 became the new support level, holding above that threshold until 8 a.m.Sharp price swings followed in both directions. An initial surge drove the price past $77,000 before a quick sell-off briefly sent it tumbling below $76,000.
Another bout of volatility pushed the price near $77,000 again before the downward slide tapered off at $76,200. At noon EST, bitcoin price hovered above $76,600 and appeared to be trending upward. Despite session volatility, bitcoin posted a modest 1% daily gain, maintaining a $1.54 trillion market cap.
The slight increase forced over $66 million in short liquidations against $32 million in long positions. Market-wide, crypto liquidations reached nearly $260 million in shorts and $138 million in longs.
As the crypto industry debated the failed CLARITY Act vote, Democratic lawmakers defended their decision to reject the bill despite gaining several key concessions from Republicans. While Sen. Angela Alsobrooks cited GOP leadership’s refusal to accept strict presidential ethics and divestment demands as the main driver of the bill’s failure, remarks from Sen. Dick Durbin underscored the party’s persistent skepticism toward cryptocurrencies.
Meanwhile, crypto industry observers noted a secondary setback from the bill’s defeat: the loss of explicit legal definitions distinguishing truly decentralized protocols from centralized entities. Decentralized exchange Curve Finance echoed this concern while expressing hope that the legislation will eventually pass.
“If the CLARITY Act moves forward, one of the most important changes for DeFi could be greater clarity around who actually controls a protocol and what they are able to change. That’s an important distinction for regulated institutions looking to interact with DeFi. Under the latest text, a protocol could fall into the ‘non-decentralized’ category if a person or coordinated group of people can materially alter the way it works, change its rules, or restrict its usage,” Curve Finance said in a note shared with Bitcoin.com News.
According to the team, the bill also includes protections for software developers and covers certain DeFi activities, helping distinguish them from operations run by traditional financial intermediaries.
At press time, as of 1 p.m. ET on Thursday afternoon, bitcoin’s price stands at $76,582 per unit.
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