Bitcoin slips below $66,000 as Clarity Act odds hit 32%

Bitcoin fell 1.8% to $65,800 by 06:35 UTC on July 22, retreating from $67,000 as the probability of the CLARITY Act passing Congress this year sank to a record low of 32% on Polymarket.

"The CLARITY Act odds dropping from 82% in January to 32% now removes a key regulatory catalyst that institutional investors were pricing in," said Jeff Mei, chief operating officer at BTSE.

The retreat came after five consecutive sessions of US spot Bitcoin ETF inflows totaling more than $600 million, the strongest stretch of institutional buying since mid-July, according to CoinGlass data. That followed an eight-week outflow streak that saw $8.2 billion exit the 11 funds — of which only $273 million, or 3.3%, has been recovered. Polymarket traders now give the legislation a 32% chance of becoming law by Dec. 31, down from 82% when the market launched in January, as the Senate's legislative calendar narrows ahead of the August recess and November midterm elections.

The Federal Reserve's July 28-29 meeting now represents the next major test for Bitcoin, with markets pricing an 83.4% probability that policymakers hold rates at 3.50-3.75%, according to CME Group's FedWatch Tool. A sustained break above $67,500 could trigger a 5% to 6% rally toward $70,000, traders said, while a drop below $60,000 would test whether recent buyers have long-term conviction.

AI chip rebound cushions the pullback

The decline was cushioned by a rebound in Asian semiconductor stocks, which reversed last week's selloff triggered by Chinese AI developments. MSCI's Asia Pacific equities gauge climbed 2%, with Samsung and Taiwan Semiconductor the largest contributors. South Korea and Taiwan benchmarks each rose about 4%, while Japan's Nikkei gained 3% after slipping into correction territory on Friday.

Short liquidations across crypto totaled approximately $200 million in the 24 hours through 06:00 UTC, CoinGlass data shows, as leveraged long positions were flushed out during the retreat from $67,000. Open interest on Bitcoin futures fell alongside the price, though funding rates remained neutral, suggesting the move was driven by spot selling rather than forced deleveraging.

Ether fell 2.5% to $1,872, tracking Bitcoin's decline, while the broader crypto market cap slipped 1.5% to $2.1 trillion. The retreat shows the fragility of the recovery: Bitcoin ETFs lost approximately $425 million in a single session shortly after their first positive week in June, demonstrating how quickly inflows can reverse.

This article is for informational purposes only and does not constitute investment advice.