Crypto Sentiment Has Tanked Amid US Market Bill Unrest

• The Crypto Fear & Greed Index has dropped 12 points to a neutral score of 49 lately.
• This happened as Coinbase CEO Brian Armstrong pulled support for the Senate bill.
• Bitcoin’s price cooled to nearly $95,000 after a multi-month high, though analysts see this as a healthy pause.

Crypto market sentiment fell on Friday after hitting a multi-month high. This change happened as the industry divided over a new US Senate market structure bill. While Bitcoin recently surged toward $98,000, political tension in Washington began to weigh on traders.

The Cooling Crypto Market Sentiment

The Fear & Greed Index slipped by 12 points and moved from a “greed” score of 61 down to a “neutral” level of 49. This drop shows how quickly the mood can sour when laws are in limbo. 

Just a day earlier, investors felt brave as Bitcoin climbed. However, that optimism faded when news broke about a stalled vote in the Senate Banking Committee.

Lawmakers originally planned to mark up the highly awaited CLARITY Act bill on Thursday. However, the committee cancelled the meeting at the last minute. They cited a need for more time to gather bipartisan support, and this delay directly hurt crypto market sentiment by creating a vacuum of information.

Industry Leaders Voice Strong Opposition

Much of the unease stemmed from the bill itself. Brian Armstrong, the CEO of Coinbase, made waves by pulling his support from the bill and stated that the current version of the bill is flawed. 

Specifically, he worries about rules that restrict stablecoin yields. He also noted that the bill might place a de facto ban on tokenised equities.

Coinbase is a massive lobbyist for the industry, and when a leader like Armstrong says he prefers “no bill over a bad bill,” people listen. His comments moved the crypto market sentiment from hopeful to cautious. 

Other executives also raised concerns about financial privacy and argued that the bill gives the government too much access to private records.

Price Reaction and Market Liquidations

The price of Bitcoin reacted to this development. It slipped from nearly $97,000 to around $95,000 on Friday, and this small drop caused a chain reaction in the markets. 

Data from Coinglass shows that over $320 million in assets were liquidated in a single day. Most of these were “long” positions, or bets that the price would go up.

Even though Bitcoin dipped, some see the move as a normal retracement. Bitcoin hit the 61.8% Fibonacci level near $98,000 before pulling back. 

Historically, pushing through this level is usually a sign that buyers have full control. For now, crypto market sentiment suggests traders are taking a breather.

Focus On the Senate Agriculture Committee

The Senate Banking Committee is not the only group involved, as the Senate Agriculture Committee pushed their own markup session to late January. 

This group oversees the Commodity Futures Trading Commission (CFTC), and the industry generally prefers the CFTC over other regulators.

Now, because both committees are delaying their work, the timeline for clear rules has moved, and this uncertainty is a main reason why the current market sentiment has tanked.

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