Crypto traders betting on further price gains took a sharp hit after the US Senate failed to advance the CLARITY Act, triggering more than USD 570 million in liquidations of bullish futures positions over 24 hours.
A latest report showed that exchanges liquidated about USD 571 million in long positions, marking the largest such wave since August 22. Short positions accounted for roughly USD 100 million during the same period. Bitcoin and Ether traders were hit hardest, with around USD 190 million in long positions liquidated for each cryptocurrency.
The liquidation wave followed a reversal in crypto prices after traders had positioned for the CLARITY Act to move forward. Bitcoin climbed to nearly USD 80,000 earlier in the week from around USD 77,000 as expectations around the legislation strengthened.
The optimism faded after the Senate vote. Bitcoin was trading around USD 75,700 at the time of the reports, while Ether also came under pressure. XRP and Solana long positions recorded smaller but significant liquidations of approximately USD 30 million and USD 22 million, respectively.
Liquidations occur when exchanges forcibly close leveraged positions after market moves push a trader's losses beyond the required collateral level. They are not the same as conventional spot-market selling, although many forced closures can intensify short-term volatility.
The Senate's setback came in a procedural vote rather than a final vote on the legislation. Senators voted 49-50 on September 15 on a motion to advance the bill, falling short of the 60 votes required to clear the procedural hurdle.
The CLARITY Act aims to establish a broader regulatory framework for digital assets and clarify the respective roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission. The legislation has undergone extensive negotiations, but disagreements over provisions including ethics safeguards and other regulatory issues prevented it from advancing.
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The failed vote has added fresh uncertainty for crypto markets that had been pricing in greater regulatory clarity. The immediate legislative path for the bill is now unclear, while the SEC and CFTC retain their existing regulatory responsibilities.
The market reaction also extended beyond the largest cryptocurrencies. XRP fell nearly 10% in Asian trading hours, while Ether and Solana also recorded notable declines, according to CoinDesk data.
The liquidation figures underline how quickly leveraged positions can unwind when an anticipated market catalyst produces a different outcome. Crypto traders are now focusing on price movements, liquidity, broader market conditions, and upcoming developments in US digital-asset regulation.