Bitcoin has retreated by approximately 6% after reaching highs of nearly USD 98,000 earlier last week. Uncertainty surrounding US crypto regulation and renewed trade tensions have weighed on broader market sentiment. The pullback follows delays in the approval of the US crypto market structure bill, known as the CLARITY Act, alongside resurfacing tariff concerns between the United States and the European Union, which have unsettled risk appetite across global markets.
Commenting on the developments, Simon Peters, Crypto Analyst at eToro, stated: "The CLARITY Act, which aims to establish a clear regulatory framework for digital assets in the US, has recently faced setbacks as several key players within the crypto industry have withdrawn their support. The main point of contention centres on whether stablecoins should be permitted to offer yield."
He added that traditional banks have raised concerns that allowing yield-bearing stablecoins could divert deposits away from the banking system, potentially posing risks to financial stability. In contrast, parts of the crypto industry argue that restrictions on stablecoin yields are an attempt by traditional finance to suppress competition.
"As a result," Peters noted, "the future of the bill has become increasingly uncertain, with some analysts suggesting it could be withdrawn entirely if consensus cannot be reached."
Investor Interest Remains Strong Despite Market Fluctuations
Despite the recent price decline, investor interest in digital assets remains evident. US spot bitcoin exchange-traded funds recorded their strongest weekly inflows since October, indicating continued institutional demand.
Key Economic Indicators to Watch
Looking ahead, market participants will be closely monitoring key US macroeconomic data releases this week. This includes Personal Consumption Expenditures (PCE) inflation data — the Federal Reserve’s preferred inflation gauge — and US GDP figures, both due on Thursday.
"A softer-than-expected inflation or growth print could reignite expectations for earlier interest rate cuts by the Federal Reserve," Peters said. "Such a scenario may provide renewed upside momentum for cryptoasset prices."
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