U.S. spot Bitcoin ETFs experienced $450 million in net withdrawals Tuesday, marking their largest daily outflow since June 25, according to SoSoValue. The heavy redemptions followed the U.S. Senate’s failure to advance the Digital Asset Market Clarity Act, which contributed to steeper losses among tokens more sensitive to U.S. regulatory policy.
The Senate motion received about 10 fewer votes than the 60 required to proceed. Seven Democrats who had been involved in negotiations over the legislation for months were among those voting against it.
Bitcoin was relatively stable after the initial reaction to the vote. BTC was trading around $75,575.59 and was little changed from midnight UTC, leaving its 24-hour decline at about 1.7%.
The broader CoinDesk 20 Index also steadied overnight. It was down less than 0.1% since midnight UTC after losing 4.6% Tuesday, its biggest daily drop since June 5.
With the legislation stalled, investors are shifting their focus to the Federal Reserve’s interest-rate announcement later Wednesday. Markets had entered the meeting generally expecting an increase.
The Senate outcome also significantly reduces the possibility of comprehensive U.S. crypto market-structure legislation passing through the chamber this year. With Congress expected to be split in January, the bill’s legislative path remains uncertain.
Altcoins Bear the Brunt
Bitcoin’s 1.7% daily decline was considerably smaller than the losses recorded by several tokens with greater exposure to U.S. regulatory developments.
XLM fell 9.6% over the past 24 hours, while XRP dropped 8.1%. Among assets included in the CoinDesk 100, 95 were trading lower during the period.
The move was less pronounced across traditional markets. Nasdaq 100 futures rose 0.33%, gold gained 0.88% and silver advanced 1.37%. The Dollar Index was flat.
Liquidations Accelerate
The market decline caused a fresh wave of deleveraging across crypto futures. More than $570 million in leveraged futures positions were liquidated over 24 hours, the highest total since Aug. 22. The figure was nevertheless well below the larger liquidation events recorded in early February and early June.
Trading activity also shifted toward the bearish side. The taker long-short volume ratio showed shorts making up 51.5% of total flow during the period. Takers are market participants who execute orders immediately against available bids or offers, removing liquidity from the order book.
Hyperliquid’s trader long-short ratio slipped to 2.53 from 2.71. The earlier reading represented the highest level since early October 2025, when bitcoin was trading above $120,000 and setting record highs.
Even after the decline, the ratio shows more than two long positions for every short. That leaves a sizable amount of bullish leverage exposed if bitcoin and other cryptocurrencies continue to decline.
Bitcoin Open Interest Rises During Decline
Bitcoin’s futures market is also showing signs of increased bearish positioning. BTC fell 1.4% over 24 hours while open interest increased from 676,000 BTC to 688,000 BTC.
An increase in open interest while prices decline is generally interpreted as traders adding short exposure. Bitcoin’s 24-hour open-interest-adjusted cumulative volume delta was negative as well, indicating that short trades were being executed more aggressively at prevailing market prices instead of through passive limit orders.
Perpetual funding rates, however, continue to show that optimism has not disappeared entirely among derivatives traders.
XRP futures followed a similar pattern, with the token losing nearly 10% as open interest edged higher. Overall XRP futures exposure remains well below its record levels, indicating that positioning across the market is still relatively light.
Derivatives Signals Turn Defensive
XRP, ETH, TRX, DOGE, XLM and SHIB all posted negative 24-hour CVD readings, pointing to aggressive selling across their derivatives markets. Funding rates were also bearish for ETH, XLM, TRX, SOL, BCH, ADA and LINK.
Options markets were less volatile than the spot and futures sell-off might suggest. Bitcoin’s BVIV and ether’s EVIV 30-day implied volatility indexes remained within recent ranges and well below their year-to-date highs, indicating that traders were not pricing an extreme volatility event around the Fed decision.
Options skew, meanwhile, pointed toward greater demand for downside protection. Bitcoin’s one-week and one-month skews remained positive and moved higher, reaching approximately 5.76% and 6.33%, respectively. Ether options showed a similar bias.
Trading volume offered a mixed signal. Calls accounted for most of the heavily traded Bitcoin options over the previous 24 hours, with the $79,000 strike attracting the most activity. In the ether market, all five of the most actively traded options were puts.
ARB, SYN and Privacy Tokens Outperform
Arbitrum’s ARB token gained 16% over the same 24-hour period after Standard Chartered projected that it could reach $10 by the end of 2030, around 70 times its current price. The bank pointed to potential revenue from Robinhood Chain and continued growth in tokenized assets. Its target for the end of this year is $0.50.
Synapse (SYN) was another notable exception to the broader sell-off, more than doubling to $0.1787 without an obvious catalyst.
The market structure behind the move suggests a short squeeze may have been responsible. SYN generated $310.64 million in futures volume over 24 hours despite having a market capitalization of just $41.18 million. Open interest represented about 60% of the token’s market value, while Binance’s long-short account ratio stood at 0.93.
Privacy-focused cryptocurrencies also continued to attract buying interest. Zcash (ZEC) rose 6.9% to $1,186.75, leading the sector, while Dash (DASH) gained 2.9%.
Lighter (LIT), the perpetuals exchange token, advanced 6% to $4.27. Raydium (RAY) added 5.4% to $1.30. Both tokens recovered part of Tuesday’s losses but remained below their levels at the start of the week.
DeFi assets were weaker after midnight UTC, with AAVE, JUP and ETHFI each declining more than 2%.
The moves came after ether.fi founder Mike Silagadze told CoinDesk before the Clarity Act vote that the U.S. currently accounts for a relatively small share of ether.fi’s market, meaning he expected the legislation to have limited impact on the project.
