The bill the crypto industry spent years lobbying for didn’t survive its first real test in the Senate. On 15 September, the Digital Asset Market Clarity Act, better known as the CLARITY Act, failed a cloture vote 49 to 50. It needed 60.
A day later, the US Federal Reserve (Fed) raised rates for the first time since 2023.
Two bad headlines in two days. Bitcoin (BTC) briefly dipped below $75,000 in the aftermath, but instead of breaking down, it turned higher. At the time of writing, BTC/USD has broken above the resistance that capped every rally since late August.
Written for 99Bitcoins by Jonatan Randin, Senior Market Analyst at PrimeXBT.
What happened in the Senate?
Backers needed every Republican plus at least seven Democrats to reach 60. On paper, they had them, as seven Democratic senators had spent months negotiating the text.
It didn’t matter. Every Democrat who voted said no, including all seven negotiators. Four Republicans joined them, with Thom Tillis switching to no for procedural reasons so he could file a motion to reconsider.
Why it fell apart
Ethics was the deal breaker. Democrats argued the conflict of interest rules didn’t properly cover the president and his family. Other sticking points included:
- Stablecoin yield: banks wanted tighter limits on rewards paid to holders
- State powers: a group of 18 attorneys general, led by New York’s Letitia James, warned the bill would limit their power to pursue crypto fraud
- Decentralised finance (DeFi): new registration rules for protocols that a person or group can control
Is the CLARITY Act dead?
For 2026, probably. Formally, no. The bill is still on the Senate calendar, but Senator Cynthia Lummis, who led the Senate text, indicated she didn’t expect it back on the floor. The seven Democrats have since said the vote isn’t the end, and staff on both sides are reportedly testing whether talks can restart before year end.
Polymarket odds of the bill being signed this year fell to around 6% by 20 September, from roughly 82% in February. A fresh attempt in 2027 looks more realistic.
Regulators aren’t waiting
While Congress stalled, the agencies kept moving:
- 17 September: the Securities and Exchange Commission (SEC) granted an Innovation Exemption for trading tokenised stocks on chain
- 17 September: the Commodity Futures Trading Commission (CFTC) sent its crypto market structure rules to the White House for review
- 18 January 2027: the expected effective date of the GENIUS Act, the US stablecoin law
Coinbase CEO Brian Armstrong argued after the vote that the industry can’t wait on Congress, and the regulators already have the tools. Agency rules can be rewritten by the next administration, so they’re no substitute for a law. But the picture isn’t frozen.
Why Bitcoin shrugged it off
The market appears to have seen this coming. Polymarket odds were already near 12% in early September, so much of the risk looks to have been priced in. Coinbase shares closed about 10% lower on the day of the vote. Bitcoin fell by less than half that.
The Fed hike was widely expected too. The 25 basis point move to 3.75% to 4.00% came with projections pointing to one more hike this year and none pencilled in after that. Traders positioned short were squeezed once price turned, and spot Bitcoin exchange traded fund (ETF) inflows of $433 million on 18 September added support.
What does the BTC/USD chart say?
On the daily chart, I’m using the 20 and 50 period exponential moving averages (EMA) along with the Relative Strength Index (RSI).
After breaking above the $70,000 region in August, Bitcoin moved into a consolidation while the RSI reset from overbought territory. At the time of writing, price has broken above the top of that range at around $82,000 and is pressing toward high timeframe resistance at $85,000.
That level matters. A reclaim of $85,000 could give us the first major higher high on the high timeframe in quite some time. That would be a sign that bulls may be back in control, and potentially the early stages of a new bull market.
If that happens, the next major resistance zone comes in at around $95,000, marked with the white circle on the chart.
What to watch next
- End of September: the quarterly Bitcoin options expiry on Deribit and the Q3 close
- US inflation data: the next Personal Consumption Expenditures (PCE) release, the Fed’s preferred inflation gauge
- Late October: the next Fed meeting, where markets were pricing close to even odds of another hike after the September decision
- Washington: any sign that CLARITY Act talks restart before year end
For now, the failed vote looks like a setback for the industry more than for the Bitcoin price. Whether the breakout holds could depend on how BTC handles the $85,000 level.
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