Bitcoin prices have retreated sharply in recent sessions, sliding around 6 percent after briefly touching levels close to USD 98,000 last week, as renewed uncertainty around US crypto regulation and global trade tensions dampened market sentiment.
The pullback comes amid delays surrounding the proposed US crypto market structure legislation, commonly referred to as the CLARITY Act, alongside resurfacing tariff concerns between the United States and the European Union. Together, these developments have weighed on broader risk appetite across global financial markets, spilling over into digital assets.
Market participants have been closely watching progress on the CLARITY Act, which is intended to establish a clearer regulatory framework for digital assets in the United States. However, recent setbacks have raised doubts over the bill’s future, particularly after divisions emerged within the crypto industry itself.
Commenting on the situation, Simon Peters, Crypto Analyst at eToro, said the legislation has faced resistance as disagreements persist over whether stablecoins should be allowed to offer yield.
“The CLARITY Act, which aims to establish a clear regulatory framework for digital assets in the US, has recently faced setbacks as several key players within the crypto industry have withdrawn their support. The main point of contention centres on whether stablecoins should be permitted to offer yield,” Peters said.
According to Peters, traditional financial institutions have expressed concern that yield-bearing stablecoins could divert deposits away from banks, potentially posing risks to financial stability. At the same time, parts of the crypto sector argue that restricting stablecoin yields is an attempt by traditional finance to curb competition from emerging digital alternatives.
“As a result, the future of the bill has become increasingly uncertain, with some analysts suggesting it could be withdrawn entirely if consensus cannot be reached,” he added.
Despite the recent price correction, signs of underlying investor interest in digital assets remain visible. US-listed spot bitcoin exchange-traded funds recorded their strongest weekly inflows since October, pointing to continued institutional participation even as prices softened.
Looking ahead, attention is expected to shift toward key US macroeconomic data releases, including Personal Consumption Expenditures inflation data, the Federal Reserve’s preferred measure of price pressures, as well as US GDP figures due later this week.
“A softer-than-expected inflation or growth print could reignite expectations for earlier interest rate cuts by the Federal Reserve,” Peters said. “Such a scenario may provide renewed upside momentum for cryptoasset prices.”
For now, analysts say bitcoin’s near-term direction is likely to remain sensitive to regulatory signals, macroeconomic data, and broader shifts in global risk sentiment, as markets navigate an increasingly complex policy and geopolitical backdrop.
