The recent crypto market rally experienced earlier this year stalled recently as traders booked profits.
Bitcoin (BTC) price plunged from the year-to-date high of $94,500 to the current $90,000. Other top altcoins like Ethereum (ETH) and Ripple (XRP) have also pulled back in the past few days.
The crypto market will be in focus next week as investors react to the upcoming markup of the Market Structure Bill, which aims to streamline the crypto industry.
The upcoming markup was confirmed by Senator Tim Scott, the Chairman of the Senate Banking Committee, who believes that the bill is important as the United States seeks to become the crypto capital of the world.
This bill’s goal is to separate the duties between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Most cryptocurrencies will be overseen by the CFTC, which is generally seen as more friendly than the SEC.
The SEC, on the other hand, will largely focus on token sales and cryptocurrencies that raised money through this approach.
The CLARITY Act comes a year after Washington passed the GENIUS Act, which helped to regulate stablecoins like USDC and USDT. At the same time, the SEC has embraced a more friendly approach in crypto regulations, by approving ETFs and ending most lawsuits.
The question among many crypto investors is whether this bill will lead to a crypto market rally.
While important, the bill itself will not lead to a crypto rally as we saw with the GENIUS Act. One main reason is that the market already expects it to pass, with odds on Polymarket being over 80%. As such, there is a likelihood that cryptocurrencies will drop as investors sell the news.
Additionally, the bill will not have an immediate impact on most coins, including the likes of Bitcoin and Ethereum. Instead, it may have some impact on companies launching cryptocurrencies in the United States.
Most importantly, cryptocurrencies remain in a bear market despite the friendliness of US regulators. For example, the XRP price has crashed into a bear market even after the SEC vs Ripple case ended.
Still, the crypto market could rally this year, as the Fear and Greed Index moves close to the greed zone and as the falling futures open interest starts to bottom. Also, more interest rate cuts will help to boost the crypto market.
