The price of Bitcoin spiked by over 3.5% in the early days of Thursday, May 14th, following the advancement of the CLARITY Act by the US Senate Banking Committee. However, the flagship cryptocurrency soon reversed towards the downside, thereby raising more questions concerning what is happening within the market. Recent on-chain analysis has surfaced, diving into the factors that might drive Bitcoin in the near and long terms.
Sentiment Turns Extremely Bullish Following Senate Committee VoteThis notable spike in the emotions of Bitcoin’s market participants apparently followed news of the CLARITY Act’s advancement (in a 15–9 Bipartisan vote). For context, the CLARITY Act is a proposed US crypto regulation bill designed to create clearer legal and regulatory rules for the digital assets industry.
As Santiment Intelligence explained, the CLARITY Act’s progress should be seen as long-term bullish news for Bitcoin. This is because clearer rules create greater certainty among investors, which in turn increases their inclination to participate in the crypto market.
As the analytics platform stated, “historically, when we see 1.55 bullish comments for every 1.00 bearish comment toward cryptocurrency’s top market cap, we advise caution.” This is because markets typically move in the opposite direction of the frenzied expectations of their crowds.
Bitcoin Miners Sell $64 Million BTC In 96 HoursThe activity of this class of market participants is important for BTC’s supply dynamics, as they generate new BTC through block rewards, which they then sell periodically to cover minor operational costs. These are unlike the mostly inactive long-term holders.
Martinez highlighted in his post that miners have sold about 800 BTC in the past 96 hours. While this is not a large amount, sudden spikes in miner selling could influence short-term market sentiment, ultimately causing a bearish injection.
As of press time, Bitcoin is trading at $79,136, down 2.9% over the past 24 hours, according to CoinGecko data.
