Crypto Market Remains Under Pressure
On Thursday, the cryptocurrency market remained under sustained pressure, as investors adopted a cautious stance ahead of the upcoming review meeting for the CLARITY Act held by the U.S. Senate Banking Committee. This bill, one of the most significant U.S. cryptocurrency regulatory bills in recent years, is designed to clarify the digital asset regulatory rules for federal agencies.
Although the industry expects clarity in cryptocurrency regulation, traders remain cautious due to macro uncertainty and outflows of institutional capital. The crypto market’s total market capitalization fell by 1.39% to US$2.65 trillion, and demand for Bitcoin and Ethereum has contracted.
Senate Banking Committee to Debate the CLARITY Act
The U.S. Senate Banking Committee will convene a review session for the CLARITY Act at 10:30 a.m. Eastern Time on the same day, to clarify the respective regulatory responsibilities of all relevant federal agencies over cryptocurrency and blockchain products.
U.S. Republican lawmakers firmly support this cryptocurrency regulatory bill, which will end the industry’s long-standing regulatory ambiguity, attract institutional investment, improve transparency, and create a stable operating environment for cryptocurrency enterprises operating within U.S. borders.
However, multiple U.S. Democratic lawmakers have questioned the current framework of this pending bill: some critics argue that its proposed anti-money laundering provisions are not strong enough to address the financial crime risks in the digital asset market, while others have called for stricter restrictions to prevent politicians and public officials from profiting from cryptocurrency-related activities.
Controversies surrounding the CLARITY Act have led investors to form expectations of regulatory shocks, elevated uncertainty in the cryptocurrency market, and dampened institutional participation and the long-term growth of the industry.
Bitcoin Falls Below $80,000 Amid Market Weakness
During Thursday’s trading session, Bitcoin fell below the $80,000 psychological threshold, posting a 1.55% drop over 24 hours, and was last quoted at $79,547.10.
The producer price inflation data released by the U.S. on Wednesday outperformed expectations, yet markets fell instead of rising, as market concerns hold that sticky inflation will prompt monetary authorities to maintain tight monetary policy for a longer period.
A broad range of risk assets, including cryptocurrencies, have generally come under pressure, while Bitcoin has faced additional selling pressure. Data from third-party platform SoSoValue shows that on May 13, U.S. spot Bitcoin ETFs recorded a single-day net outflow of approximately 635 million U.S. dollars.
The market generally interprets capital outflows from large ETFs as a sign of weak institutional demand, which has exerted downward pressure on Bitcoin’s short-term price.
Ethereum Faces Heavy Liquidation Pressure
During this trading session, Ethereum’s token price weakened significantly, dragged down by intensifying selling pressure across the entire derivatives market, falling 2.02% to stand at US$2261.10.
Ethereum’s downward price trend was exacerbated by leveraged liquidations. Third-party market reports show that positions worth more than $250 million were forcibly liquidated. Price movements that diverged from open holdings triggered additional position closeouts, further accelerating the cryptocurrency’s price decline.
We find that Ethereum’s weak price trend reflects caution across the entire market, which stems from inflation, a decline in institutional capital inflows, and regulatory uncertainty.
Key Bitcoin and Ethereum Levels to Watch
Industry analysts point out that Bitcoin’s short-term outlook remains neutral but still carries downside risks, with $78,000 serving as the core support level; if the price breaks below this threshold, it will dip to test the area around $76,000.
If the price rebounds to above $80,500, it will boost market sentiment and attract a new round of buyers to enter the market.
Ethereum’s core observed support interval is $2200–$2221; if this level holds firm, its short-term price will stabilize, while a breach of the $2270 rebound threshold will boost short-term trading momentum.
Conclusion
At present, a cautious sentiment prevails across the overall cryptocurrency market, driven primarily by two major pending events: the resolution on the CLARITY Act by the U.S. Senate Banking Committee and the updated release of U.S. inflation data.
Bitcoin and Ethereum are facing threefold pressures: ETF capital outflows, liquidation of leveraged positions, and weak investor sentiment. While this act could provide regulatory clarity in the long run, traders are currently closely tracking short-term volatility and key price support levels.
