The Impact of the CLARITY Act on the Price of Bitcoin, Ethereum, and Dogecoin
As a direct consequence of the CLARITY Act, there is uneasiness in the entire crypto market due to anticipated changes in market structure and regulation. In the last 24 hours, the crypto market has seen a decline of 0.84% attributed to Bitcoin, Ethereum, and Dogecoin apathetic to these developments. The prevailing market sentiment is the indecisiveness surrounding the contours of US monetary policy and the timing of rate cuts by the Federal Reserve.
Market Sentiment of Bitcoin
Recently, Bitcoin faced a decline to $89,200, and has since made a steady climb to $91,300. In the meantime, he price has plunged to the 2025 high of $95,000. According to market sentiment, there is enormous pressure towards profit taking as the price of Bitcoin is expected to reach 92,000. On the other hand, if the price breaks below $88,000 there is a potential for even further decline.
The Ethereum Price Range
Ethereum is also in a similar situation as it consolidates between $3,100 and $3,200. This is minor, as the biggest accomplishment is the weekly gain of over 6%. At the moment, the price of ETH is just below $3,132.
Once profitability is reached, Ethereum merges will see Ethereum’s price increase to $3,500, and with that comes the potential of Ethereum over 3000. This price is proposed to test the support at $2900.
Dogecoin Dynamics
Dogecoin hit highs of 23% last week, however, it was unable to maintain those highs and currently sits around 0.1428. Doge is being supported by buyers around $0.14 however should buyer support fail, the next support level is at $0.13. If buyers continue to stay active, a bounce to 0.16 is likely.
Understanding the CLARITY Act
Currently, the CLARITY Act is one of the many proposed acts from the US government in an attempt to regulate the crypto industry. The intention of the CLARITY Act is to make crypto trading more ethical by prohibiting dumping, wash trading, and volume falsifying.
The Act also includes rules surrounding the proof of reserves, regular audits, and a real-time access provision for regulators on certain transactions and risk assessments.
The legal framework surrounding crypto trading in the US is aimed at removing “opaque” liquidations, front running, and the $100 billion October market loss. With less legal grey areas, US-based institutional investors could feel more at ease.
Senate Committees to Debate the Bill
After several months of waiting, the first CLARITY Act markups will take place on January 15. The first two Committees of the US Senate that will deal with the Bill will be the Banking and Agriculture Committees.
As with any Bill in the US a combination of debates, amendments, and a vote will take place to determine what gets sent to the Senate floor.
The reason for two committees is due to the “crossovers” that the Bill creates with respect to the regulation of Securities vs Commodities and the “confusion” of powers between the SEC and the CFTC.
Potential Impact on Cryptocurrency Pricing
Should current legislation be passed, the CLARITY Act could reshape the U.S. crypto market. More institutional altcoin investment (beyond Bitcoin) could boost the liquidity of Ethereum and Dogecoin and better discover and manipulate Bitcoin’s price. Until the January 15 ruling that could significantly change U.S. crypto trading, Bitcoin price volatility will likely continue.
