Bitcoin Crashed $6K and Wiped $126B as the CLARITY Act Advanced in Senate

Key Takeaways

• Bitcoin crashed from $6K to $76K over four days after the CLARITY Act advanced in the Senate committee on May 15 in a textbook sell-the-news bloodbath
• $657M in positions were liquidated in 24 hours, with $584M from longs, as BTC ETFs recorded $1B in weekly outflows
• Ethereum fell 10%, wiping $30B in market cap, as Fear and Greed crashed from neutral 50 to fear territory at 28 in just days

After the CLARITY Act crypto bill advanced in the Senate Banking Committee on May 15. Amidst this, Bitcoin’s price briefly moved higher before reversing over the next few sessions. Bitcoin fell roughly $6,000 to around $76,000, while the broader crypto market lost close to $190 billion in value within days. The move came after weeks of optimism around possible US crypto regulation. But once the vote cleared the committee, traders started taking profits instead of adding new positions.

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How the Most Important Crypto Vote in History Triggered a Sell the News Crash

The pullback quickly spread across the market. According to CoinGlass data, around $657 million in crypto positions were liquidated in 24 hours. It should be noted that most of the losses are coming from leveraged long positions. At the same time, Bitcoin ETF outflows crossed $1 billion for the week. It ended a six-week streak of inflows.

Ethereum price action was weaker than Bitcoin’s during the selloff. ETH dropped about 10%, while Solana, XRP, and other major altcoins also moved lower.

Part of the decline came from how heavily traders had already positioned for bullish news around the bill. Markets had spent months expecting some form of regulatory clarity from regulators. After the committee vote happened, traders started taking money off the table. Soon, the market lost momentum.

Spot Bitcoin ETF flows also turned negative at the same time. Data from Farside Investors showed heavy withdrawals across several funds during the week. This added to the weaker sentiment around crypto markets.

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Macro Concerns Were Already Building

The selloff also happened during a tougher macro week for risk assets. US inflation data came in hotter than expected. In addition, Treasury yields moved higher, and traders further reduced expectations for Federal Reserve rate cuts this year. Rising tensions involving Iran also pushed oil prices higher and added pressure across global markets.

The Crypto Fear and Greed Index dropped from 50 to 25. This is within days as sentiment weakened across both Bitcoin and altcoins.

Some analysts still view the CLARITY Act as a longer-term positive because it could finally establish clearer rules between the SEC and CFTC. But for now, traders appear more focused on liquidity, rates, and short-term positioning than the legislation itself.

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