Bitcoin dropped 1.7% to $76,862 since midnight UTC, erasing Monday’s rally as market expectations for the CLARITY Act to become law this year weakened sharply.

Bitcoin had advanced from $75,916.49 to $79,427 on Monday, but the move was largely reversed Tuesday. At $76,862, BTC remained 6.6% below its monthly peak of $82,284, recorded on Sept. 4. Ether fell 1.6% to $2,474.76, while solana declined 2% to $100.43.

The shift in bitcoin’s price coincided with a sharp decline in Polymarket’s CLARITY Act odds. The probability of the legislation becoming law in 2026 had risen to 34% Monday before falling to 17%. The drop followed reports that Democrats had prepared a counterproposal after rejecting an amended Republican version circulated Sunday.

Negotiations are reportedly focused on ethics rules governing cryptocurrency holdings by public officials, rather than the legislation’s broader market-structure provisions.

The Senate is scheduled to vote at 2:15 p.m. ET on a cloture motion that would advance the bill. The procedural vote requires 60 votes. If successful, the legislation would move the industry closer to a defined U.S. framework for determining regulatory oversight of digital assets. A defeat could leave market-structure legislation on hold until after the November midterm elections.

The broader crypto market also faced heavy selling. Ninety-two of the CoinDesk 100 constituents declined, sending the index 1.6% lower.

Crypto Diverges From U.S. Equity Markets

U.S. stock futures were moving higher while cryptocurrencies retreated. Nasdaq 100 futures gained 0.43%, and S&P 500 futures increased 0.35% as markets recovered some of Monday’s AI-related losses.

The Dollar Index also climbed 0.17%. The moves marked a reversal from the previous day, when crypto was the only major asset class showing gains.

Futures Activity Shows Weak Conviction

Crypto derivatives markets remained relatively balanced ahead of the Senate vote, with long and short taker volume showing no clear dominance.

Total open interest declined 1% during the past 24 hours to $135 billion, even as trading volume surged 54% to $207 billion. The divergence suggests traders with existing positions are closing them faster than new positions are being added.

Marex analysts said bitcoin’s overnight move toward $77,000 was accompanied by taker selling in futures. Takers execute trades at available market prices, thereby removing liquidity from order books.

Bitcoin futures open interest remained below 680,000 BTC, indicating subdued demand for leveraged positions.

Ether, solana and XRP futures also continued to see declining open interest. Solana open interest reached 58.81 million tokens, its lowest point since May, according to CoinGlass.

Negative 24-hour open-interest-adjusted cumulative volume delta readings across major tokens pointed to bearish pressure. The indicator suggests that a greater proportion of short-side trading is being executed through market orders rather than passive limit orders.

XLM Posts Stronger Spot and Futures Demand

Stellar’s XLM was one of the strongest performers against the broader market trend. Its spot price increased 4% over 24 hours, while futures open interest rose more than 10% to 1 billion XLM.

Rising prices combined with increasing open interest are commonly interpreted as long accumulation and stronger bullish positioning. Annualized funding rates near 10% also suggested continued demand for upside exposure without excessive leverage.

Funding rates were moderately positive for most major cryptocurrencies, including bitcoin. Ether and SOL remained slightly negative, indicating a mild preference for short positions.

That short exposure could become fuel for a short squeeze if the CLARITY Act vote produces a positive surprise. TRX remained an outlier, with deeply negative open interest persisting in recent sessions.

Options Market Signals Limited Volatility Risk

Bitcoin’s BVIV and ether’s EVIV 30-day implied-volatility indexes moved higher ahead of the Senate vote, but both remained near recent levels and far below the peaks recorded in February and June.

The modest increase points to greater demand for protection as traders position for possible market volatility surrounding the vote.

Deribit’s implied-volatility curve remained normal and upward sloping, suggesting options traders were anticipating relatively stable conditions over the next 24 hours rather than a major volatility shock.

Higher-strike calls dominated the top five bitcoin options by 24-hour volume, while ether options showed the same pattern, indicating continued demand for upside exposure.

FIL Gives Back Monday’s Gains

Filecoin (FIL) reversed part of its 27% Monday rally, which had coincided with a 70% increase in futures open interest.

FIL fell 5.1% since midnight UTC to $0.89 and was down 13% over 24 hours. Futures open interest declined 23% to $106 million.

AI and computing tokens remained under pressure for a second straight session following Anthropic CEO Dario Amodei’s weekend call to slow AI development.

Internet Computer (ICP) dropped 6% to $2.58, Theta Network declined 4.5%, and NEAR Protocol fell 3.7%.

Uniswap (UNI) moved against the wider DeFi sell-off, gaining 1% to $6.60 and rising 4.8% over 24 hours. The token is among those considered particularly sensitive to the outcome of Tuesday’s vote.

Venice Token (VVV) fell another 4.5% to $22.05 after retreating roughly 20% from last Wednesday’s record high. Its earlier surge was driven by a token burn and short covering rather than sustained buying.

Monero (XMR) and Zcash (ZEC) continued to move in opposite directions for a fifth consecutive session. XMR gained 0.37% to $516.41, while ZEC lost 1.87% to $1,141.

Cosmos (ATOM) and XDC Network (XDC) each gained 1.4%. XLM was almost unchanged on the day but remained 4.3% higher over 24 hours.

CoinMarketCap’s Altcoin Season Index fell to 36 out of 100, leaving it in neutral territory after standing at 51 last week.