- Bitcoin fell $6,000 since the CLARITY Act vote, wiping $126 billion in a sell-the-news event.
- Trump paused a planned Iran strike after Gulf leaders urged more time for negotiations.
- US CPI inflation is tracking toward 5.2% by November midterms the highest since early 2023.
Bitcoin has dropped $6,000 since the CLARITY Act advanced to the full Senate, wiping $126 billion from its market cap in what analysts are calling a textbook sell-the-news event. Ethereum fell more than 10%, erasing $30 billion.
The total crypto market cap is down $190 billion in five days. Bitcoin ETFs recorded $700 million in net outflows over three days. And two macro forces are making recovery difficult. A US-Iran standoff that refuses to resolve and inflation data pointing toward 5% by year-end.
The Iran Standoff Is Going Nowhere
Trump called off a planned military strike on Iran after the leaders of Qatar, Saudi Arabia, and the UAE personally called him and asked him to hold off, saying a deal was within reach. The military has been ordered to remain ready for a full-scale assault at any moment.
Iran sent an updated proposal to end the war. Trump is expected to convene his national security team to review both diplomatic and military options. A senior US official said that if Iran does not shift its position, negotiations may have to continue through bombs.
Military advisor Rezaei dismissed the postponed strike as false hope designed to force submission. Supreme Leader Khamenei warned that if the state of war continues, Iran will open new fronts.
Inflation Is Making Everything Worse
US CPI inflation is on track to exceed 5% as early as this year. Over the past six months, monthly inflation has averaged +0.4%, with March reading at +0.9% and April at +0.6%. If the trend continues, year-on-year inflation could hit 5.2% by the November midterms, the highest level since February 2023 and more than double the February 2026 reading.
Even if monthly prints ease to 0.3%, annual inflation would still rise to 4.4%. The Federal Reserve has no room to cut rates. The prospect of rate hikes is back on the table. Neither scenario is friendly for Bitcoin or risk assets broadly.
Bitcoin Tests Key Support Zone
Bitcoin spent two months consolidating before reclaiming the key support and resistance zone between $71,000 and $76,000. It confirmed that level with a clean retest and pushed higher. But the move came on declining volume and failed to reach $86,000 heading into the weekend. Price has since rolled over back toward the lower end of the range.
The level that matters now is $74,000 to $75,000. If bulls hold it, the structure remains intact, and another attempt toward $83,000 is possible. If support breaks, analysts are watching for a move below $74,000, which could open the door for a deeper correction.
Related: Bitcoin Drops Below $77K as Traders Turn Defensive
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