A crypto crash is happening, with Bitcoin and top altcoins erasing some of their previous gains. Tokens such as Story (IP), SPX6900 (SPX), Aerodrome Finance (AERO), and Monero tumbled by double-digit percentages. As a result, the market cap of all coins fell 2.45% to $3.2 trillion.
Crypto Crash Triggered by CLARITY Act Failure
The crypto market crash is happening as investors react to developments regarding the Market Structure Bill, commonly known as the CLARITY Act. This bill, which was supposed to go through a markup in the Senate, stalled after Coinbase withdrew its support. Odds of the bill being signed into law this year dropped from 63% to 49%.
In a statement, Brian Armstrong argued that the bill would kill the fast-growing asset tokenization industry, interfere with stablecoin rewards, invade user privacy in the decentralized finance (DeFi) industry, and erode the CFTC’s authority to regulate the industry.
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Still, while Coinbase has withdrawn its support, other popular crypto companies, like Kraken and Robinhood, remain supportive of the bill. Also, leaders from all parties, including Senator Cynthia Lummis and Chairman Tim Scott, are committed to working to fix the issues Coinbase addressed.
Profit Taking and Bitcoin’s Failure to Cross $100k
The crypto crash is also happening as investors book profits after a strong run this week. Indeed, a closer look shows that the top laggards were some of the best-performing coins earlier this week. Story token rose by nearly 200% from its lowest level to its highest this month.
Similarly, Monero price retreated after reaching a record high of $798 as profit-taking continued. At its peak, it was up by nearly 95% from its lowest point this year.
The crypto market crash is underway as Bitcoin failed to cross the $100,000 mark, which would have confirmed the bullish breakout. Bitcoin was trading at $95,390, down slightly from the year-to-date high of $98,000.
On the positive side, Bitcoin price has formed an ascending triangle pattern, pointing to an eventual comeback, potentially to an all-time high this year. Also, the Crypto Fear and Greed Index is trending upward and nearing the greed zone.
Therefore, a potential deal on the CLARITY Act and a Bitcoin breakout above $100k will likely lead to a rebound in the crypto market.
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