Crypto market sentiment softened after reaching a multi-month high, as political uncertainty in Washington weighed on investor confidence. The Crypto Fear & Greed Index dropped 12 points to a neutral reading of 49, reflecting a rapid shift in mood driven by stalled regulatory progress and public opposition from key industry figures.
The sentiment reversal accelerated after the Senate Banking Committee cancelled a planned markup session for the CLARITY Act at the last minute. Lawmakers cited the need for additional time to secure bipartisan support, leaving the bill in limbo and removing near-term regulatory clarity.
Armstrong’s comments resonated across the market due to Coinbase’s influence in policy discussions. Other industry executives echoed concerns, particularly around financial privacy and expanded government access to transaction records. These objections contributed to a broader reassessment of regulatory risk among traders and investors.
Bitcoin declined from near $97,000 to approximately $95,000 on Friday. According to Coinglass data, the move triggered more than $320 million in liquidations within 24 hours, predominantly from long positions. Despite the decline, some analysts interpret the move as a technical pause, noting that Bitcoin had just tested the 61.8% Fibonacci retracement level near $98,000.
Attention now turns to the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission and has postponed its own markup session until late January. With both committees delaying action, uncertainty around the regulatory timeline remains elevated, suggesting market sentiment may stay cautious until clearer signals emerge from lawmakers.
Source: Crypto Fear & Greed Index data, company statements, Coinglass, and US Senate disclosures.
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