A markup for the stalled CLARITY Act is slated for Thursday, representing the potential catalyst bitcoin has been waiting for to break higher after breaching the key $80,000 level.
Mark Palmer, Benchmark’s managing director, called the markup “a meaningful breakthrough for the effort to establish long-awaited regulatory clarity for crypto markets in the US.”
“Policy is becoming a market catalyst again. That matters because crypto markets are increasingly pricing regulatory clarity as an institutional access event,” Timothy Misir, head of research at Blockhead Research Network, said.
Sid Powell, CEO of Maple Finance, told Sherwood News that bitcoin is sitting at an inflection point. While geopolitical tensions remain a live variable that could move bitcoin in either direction this week, depending on where the headlines lean, the bigger catalyst to watch is the CLARITY Act.
Meanwhile, bitcoin ETFs registered their sixth consecutive week of inflows, with $622.75 million in inflows last week, according to SoSoValue, suggesting strong institutional interest.
The asset has been fairly resilient amid geopolitical uncertainty, holding the key $80,000 for several days. This level is acting “as the key short-term battleground between bulls and bears, with concentrated long-side liquidity accumulating around the area,” according to Dean Chen, a Bitunix analyst.
Nic Puckrin, cofounder of Coin Bureau, told Sherwood that markets are still seeing a complete breakdown in talks as a risk scenario, not the base case.
If it becomes the base case, he said, he expects to see Brent oil surge back above $110 a barrel and bitcoin breaking down below $80,000.
“As the negotiations dominate newsflow, markets are reacting to these swings more than fundamentals. That means there’s a lack of conviction in the market — and this typically makes for an extremely fragile trading environment, where every headline can sharply reverse positioning,” Puckrin said.
Looking ahead, Misir said that this week is a confirmation test, as after having reclaimed two critical on-chain levels — the True Market Mean at $78,200 and the short-term holder cost basis at $79,100 — bitcoin needs to hold above $80,000 to keep the recovery structure intact.
A sustained move through $82,500, the next resistance level, could force additional short covering and open the path toward $85,000, he said.
Misir added, however, that “the rally is not yet super clean.”
“Failure back below the True Market Mean would weaken the signal and likely return price to a more defensive range. The market is no longer simply recovering. It is testing whether this recovery can become a trend,” Misir said.
