Bitcoin erased an entire weekend rally in a matter of hours on Monday, falling back below $77,000 as traders rushed to de-risk ahead of two events now converging on the same 48-hour window: a Senate procedural vote on the CLARITY Act and the Federal Reserve's next rate decision. Ether slipped under $2,500 in sympathy, and more than $100 million in leveraged crypto positions were wiped out over the prior 12 hours, with some trackers putting the figure closer to $200 million once altcoin liquidations are included.
The retreat fully reversed Bitcoin's climb above $79,000 just a day earlier. CoinDesk reported the token changing hands near $77,800, with XRP giving back gains to $1.42 from a high of $1.49 and Solana following Bitcoin and Ether lower. Rising oil prices added to the unease: West Texas Intermediate crude climbed toward $103 a barrel, reviving inflation worries just as the Fed prepares to announce its decision on Wednesday.
That decision is widely expected to be a 25-basis-point hike lifting the federal funds target to 3.75%-4%, an outcome markets have been pricing with growing confidence as the 10-year Treasury yield hovers near 5%. Research desk 10x Research framed the setup as a “gap risk” trade: a week earlier, Fed Chair Warsh's hawkish remarks looked like they might be brushed off by markets, but two subsequent inflation reports have since reshaped bond pricing heading into Wednesday's meeting, leaving little room for a dovish surprise to go unrewarded, or a hawkish one to go unpunished. Rate futures are now pricing roughly a 90% probability of a hike this week, up sharply from where odds sat only a few weeks ago, which helps explain why a token that briefly traded above $79,000 could give back the entire move in a single session once that repricing accelerated.
Layered on top of the Fed is Tuesday's cloture vote on the CLARITY Act, the bill that would split digital-asset oversight between the SEC and CFTC. The vote needs 60 senators to advance to full debate, and Republican negotiators have reportedly offered compromises that Democrats are still pushing to expand. Sen. Cynthia Lummis, a lead sponsor, put the standoff bluntly: "The Democrats want more. They always want more." Away from the Senate floor, the Trump administration has launched its own last-mile push to convince holdout senators to advance the bill before Tuesday's tally.
Prediction markets are reflecting the uncertainty in real time. Traders have flagged a wave of freshly funded Polymarket wallets, accounts opened as recently as August and September, stacking sizable bets against the CLARITY Act becoming law this year, a signal some read as informed positioning rather than retail noise given how quickly and heavily the new wallets have moved. Combined with a Fed decision that could go either way on tone, the setup has left even bullish traders cautious. Michaël van de Poppe, posting as the market slid, called the drop "clearly the reason why the markets are selling off," adding that Bitcoin looked to be sweeping recent lows during what he described as "a volatile 48 hours", while noting he would be a buyer on a further dip.
The immediate reaction underscores how tightly crypto's short-term direction is now tied to Washington rather than on-chain fundamentals. A clean 60-vote outcome Tuesday, paired with a Fed statement that leans dovish on future hikes, would remove two of the market's biggest overhangs in the same week. A stalled cloture vote alongside a hawkish Fed press conference would do the opposite, and the size of Monday's liquidations suggests leveraged traders are no longer willing to hold that risk into the event. Attention now shifts to whether the bank desks that have already flipped to expecting a hike turn out to be right, and whether Tuesday's cloture count clears the 60-vote bar or sends the bill back to negotiations.
