Bitcoin took a hit on Thursday, falling nearly 2% to trade under $64,700. This drop erased around $20 billion from its market capitalization and sparked $42.3 million in liquidations of long positions. The selling pressure intensified as optimism faded over stalled progress in the U.S. Senate on the CLARITY Act.
Legislative Stalemate and Market Turmoil
Earlier in the day, bitcoin hovered between $66,200 and $65,750, fueled by reports that the Senate was close to agreeing on key provisions of the CLARITY Act. However, just before midnight, the cryptocurrency broke below the $65,750 support level, slipping to $65,368. A brief rebound followed, but selling resumed before dawn, pushing prices lower again.
The retreat in bitcoin prices coincided with a spike in global oil prices. Brent crude surged past $101 per barrel, crossing a multi-month high amid escalating Middle Eastern tensions. U.S. West Texas Intermediate also jumped above $92 per barrel. The rise in energy costs came after U.S. President Donald Trump signaled the possibility of military action against Iran, while ongoing Houthi attacks in the Red Sea continued to disrupt vital shipping lanes. These events added significant geopolitical risk premiums to oil markets.
The broader financial markets responded swiftly to the energy shock, raising concerns over persistent inflation. Bitcoin’s market cap dropped from over $1.32 trillion on Wednesday afternoon to around $1.3 trillion by Thursday, reflecting renewed caution among investors.
The decline also triggered a surge in liquidations: long positions worth $42.3 million were wiped out, more than double the $18 million liquidated a day earlier, while short position liquidations reached $6.2 million, about half the previous day’s level. Analysts like Bitunix's Dean Chen point to energy shocks, Federal Reserve policy, and liquidity constraints as key factors shaping crypto’s short-term outlook.
This content is for informational purposes and does not constitute financial advice.
