Bitcoin Price Reclaims $78K as CLARITY Act Talks Heat Up

CLARITY Act News Sparks Monday Rebound

Bitcoin’s price rallied past $78,000 on Monday, rebounding from quiet weekend trading as momentum built around the CLARITY Act. Market optimism swelled following reports that Republican revisions to the bill won over hesitant Democrats, who gathered for a caucus meeting to deliberate on the legislation.

Still, market data shows the top cryptocurrency initially teetered on a sharp downturn, tumbling from around $77,400 to a Sunday night low of $76,464. However, a quick relief rally pushed bitcoin back above $77,000, nearly touching $77,800 just three hours later.

From then on, bitcoin’s price largely held above $77,500 until 5:25 a.m. EST, when its second rally lifted it above $78,000 for the first time since Friday. However, the cryptocurrency stalled below $78,300, and the resulting sell-off dragged the price back below $78,000. The price rallied for a third time, appearing to find support above $78,400.

As of publication (1:30 p.m. EST), bitcoin’s price hovered around $78,882, leaving it with a market capitalization of approximately $1.58 trillion. With the first half of the month nearly over, bitcoin’s price remains virtually unchanged from its Sept. 1 opening of around $78,500.

Meanwhile, on the derivatives front, the cryptocurrency’s steady climb wiped out more than $41 million in short positions over a 24-hour period. In contrast, only $16 million in long bets were liquidated during the same timeframe. Overall, the crypto economy saw $223 million in leveraged positions wiped out, with liquidated long bets at nearly $126 million.

Despite an apparent change of stance on the bill by Democratic Party senators, momentum was upended by reports that New York Attorney General Letitia James was leading a bipartisan coalition to kill the bill before the vote. While James cites draft text that she says emboldens scammers, the last-minute attempt to kill the bill appears to fit with the opposition’s strategy of targeting U.S. President Donald Trump’s legislative goals.

Although Republican senators had updated the bill’s text to soothe concerns raised by the opposition, the latest efforts by 18 attorneys general will likely complicate efforts to win over enough Democrats needed for the bill to pass. In fact, the back-and-forth in Washington has convinced bettors on prediction markets that the bill is unlikely to be signed into law this year.

While the U.S. Treasury’s Aug. 19 announcement provided bitcoin’s initial boost, market insiders still see the CLARITY Act as the true engine for a sustained rally. Without it, continued political gridlock risks trapping the cryptocurrency in a sideways range.