U.S. spot Bitcoin ETFs saw $450 million in net outflows Tuesday, marking their largest daily withdrawal since June 25, as the Senate’s failure to move the Digital Asset Market Clarity Act forward intensified selling across crypto assets tied more closely to U.S. regulatory developments.

SoSoValue data showed the $450 million exit came after lawmakers failed to secure the 60 votes required to advance the legislation. The motion fell short by roughly 10 votes, with seven Democrats who had spent months working on the bill’s language voting against it.

Bitcoin initially came under pressure after the Senate vote but later steadied. BTC was trading around $75,575.59 and was little changed from midnight UTC, leaving its 24-hour decline at 1.7%.

The broader CoinDesk 20 Index also stabilized, slipping less than 0.1% since midnight UTC. That followed a 4.6% decline Tuesday, its largest daily drop since June 5.

The market’s focus has now moved to the Federal Reserve’s interest-rate announcement later Wednesday. Traders had entered the meeting with a rate increase as the prevailing expectation.

The Senate setback also leaves the Clarity Act with little prospect of clearing the chamber this year. With Congress expected to have split control in January, the outlook for market-structure legislation remains uncertain.

Altcoins Suffer Deeper Losses

Bitcoin’s decline was relatively limited compared with the sell-off in tokens that are more exposed to U.S. regulatory treatment.

Stellar’s XLM dropped 9.6% over 24 hours, while XRP declined 8.1%. A total of 95 assets among the CoinDesk 100 were lower during the period.

Traditional markets showed considerably less movement. Nasdaq 100 futures rose 0.33%, gold gained 0.88% and silver climbed 1.37%. The Dollar Index was unchanged.

Crypto Liquidations Exceed $570M

The decline also triggered substantial forced selling in derivatives markets. More than $570 million in leveraged futures positions were liquidated over the 24-hour period, the highest level since Aug. 22.

Even so, the liquidation total remained below the much larger market washouts recorded in early February and early June.

The taker long-short volume ratio moved into bearish territory, with short positions representing 51.5% of trading flow. Takers execute orders immediately against existing bids or offers, removing available liquidity from the order book.

Hyperliquid’s trader long-short ratio declined to 2.53 from 2.71. The earlier reading was the highest since early October 2025, when bitcoin was trading above $120,000.

Longs still outnumber shorts by more than two to one, indicating that a substantial amount of bullish leverage remains in the market and could face liquidation if prices continue to fall.

Bitcoin Open Interest Rises as Price Falls

Bitcoin futures positioning has also taken on a more defensive tone. BTC declined 1.4% over 24 hours while futures open interest increased from 676,000 BTC to 688,000 BTC.

When open interest rises during a price decline, traders often interpret the combination as evidence of additional short exposure. Bitcoin’s 24-hour OI-adjusted cumulative volume delta was negative as well, indicating that short trades were being executed more aggressively at market prices.

Perpetual funding rates, however, suggest some traders continue to maintain bullish exposure.

XRP futures displayed a similar pattern. XRP fell nearly 10% while open interest edged higher, although the total remains well below its previous records, indicating that overall positioning has not become particularly crowded.

Options Signal Greater Demand for Protection

Derivative indicators across major altcoins remain weak. XRP, ETH, TRX, DOGE, XLM and SHIB all recorded negative 24-hour CVD readings, suggesting aggressive selling in derivatives markets.

Funding rates were also bearish for ETH, XLM, TRX, SOL, BCH, ADA and LINK.

Implied volatility has not reflected a comparable jump in expected turbulence. The 30-day bitcoin and ether volatility indexes, BVIV and EVIV, remain within recent ranges and well below their year-to-date highs.

Bitcoin options skew, by contrast, has become more defensive. Both one-week and one-month skews are positive and rising, reaching roughly 5.76% and 6.33%, respectively, indicating increased demand for puts and downside protection. Ether options show a similar pattern.

Options volume provides a mixed signal. Calls dominated the most-traded Bitcoin contracts over the previous 24 hours, led by the $79,000 strike. In ether, the five most actively traded options were all puts.

ARB and SYN Buck the Market Decline

Arbitrum (ARB) gained 16% over the past 24 hours after Standard Chartered projected that the token could reach $10 by the end of 2030, approximately 70 times its current level.

The bank pointed to potential revenue from Robinhood Chain and continued growth in tokenized assets. Its nearer-term forecast is $0.50 by the end of this year.

Synapse (SYN) also more than doubled, reaching $0.1787 without an obvious catalyst.

The underlying derivatives data suggests a short squeeze may have driven the rally. SYN recorded $310.64 million in futures volume against a market capitalization of only $41.18 million. Open interest was equal to 60% of the token’s value, while Binance’s long-short account ratio stood at 0.93.

Privacy-focused assets remained another area of strength. Zcash (ZEC) rose 6.9% to $1,186.75, making it the strongest performer in the sector, while Dash (DASH) gained 2.9%.

Lighter (LIT) advanced 6% to $4.27, and Raydium (RAY) climbed 5.4% to $1.30. Both recovered part of Tuesday’s losses but remained below their levels at the beginning of the week.

DeFi tokens AAVE, JUP and ETHFI each declined more than 2% after midnight UTC.

The weakness came despite comments from ether.fi founder Mike Silagadze before the Clarity Act vote. He told CoinDesk that the U.S. currently represents a relatively small portion of ether.fi’s market and therefore viewed the legislation as having limited impact on the project.