Bitcoin Falls Below $78K as Clarity Act Vote and Fed Rate Hike Loom

Bitcoin fell below $78,000 on Tuesday, reversing part of Monday’s rally as uncertainty surrounding the U.S. Clarity Act and another rise in oil prices weighed on the broader cryptocurrency market.

Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, slipped to around $77,800 after climbing above $79,000 on Monday. Major altcoins followed the decline, with XRP retreating to $1.42 after reaching $1.49, while Ethereum (ETH) and Solana (SOL) also moved lower. Despite the pullback, XRP remained positioned to potentially form a bullish golden crossover.

Crypto market sentiment weakened as U.S. lawmakers entered final negotiations over the Digital Asset Market Clarity Act. Democrats are reportedly seeking further changes despite President Donald Trump agreeing to revised ethics provisions included in a Senate draft circulated by Republicans over the weekend.

Sen. Cynthia Lummis, a leading Republican supporter of the legislation, criticized the continued demands, saying Democrats “want more” and arguing that further delays could lead to additional requests.

The Senate is scheduled to hold a procedural vote Tuesday on advancing the Clarity Act. The measure needs 60 votes, requiring some Democratic support. If approved, the legislation would establish clearer divisions of cryptocurrency oversight between the Securities and Exchange Commission and Commodity Futures Trading Commission.

Coinbase CEO Brian Armstrong has argued that regulatory clarity could still emerge even if the legislation fails, pointing to potential SEC and CFTC rulemaking.

Bitcoin also faced pressure from rising energy prices. West Texas Intermediate crude futures rebounded to approximately $103 per barrel after briefly falling to $100 overnight. Higher oil prices could intensify inflation concerns and reinforce expectations for tighter U.S. monetary policy.

The Federal Reserve is expected to raise interest rates by 25 basis points Wednesday, taking its target range to 3.75%–4%. With the 10-year Treasury yield near 5%, a rate hike combined with hawkish Fed guidance could create additional pressure on Bitcoin and other risk-sensitive assets.