Bitcoin and Crypto Stocks Rebound After Clarity Act Setback

Bitcoin (BTC) has rebounded to reclaim the $80,000 level, reaching approximately $88,000 amid a 5% rise over the past 24 hours according to CoinGecko. TradingView data showed Bitcoin hitting an intraday high of $81,034 at Bitstamp.

The rebound follows a sharp decline triggered by the U.S. Senate's failure to advance the Clarity Act on May 15, which caused Coinbase and Circle to drop around 10%, while Strategy and Strive fell about 5% and American Bitcoin dropped nearly 8%.

Subsequent regulatory actions by the CFTC and SEC helped revive market sentiment. The CFTC issued a no-action relief for passive software providers on May 17, and the SEC temporarily eased requirements for platforms supporting tokenized securities trading. The CFTC also submitted crypto regulation proposals to the White House for review without disclosing details.

As a result, crypto-related stocks surged on May 18, with Strategy rising over 13%, Coinbase and American Bitcoin up around 11%, Robinhood climbing nearly 9%, while Circle, Strive, and Bitcoin mining firm Riot Platforms gained between 5-7%.

Bitcoin's price rise was also supported by a rebound in U.S. Treasury yields, which rose 90 basis points to 5.34% for the 30-year bond amid Middle East oil market instability. This led to concentrated liquidation of crypto short positions, with approximately $250 million in shorts being unwound over four hours according to CoinGlass.

The International Energy Agency (IEA) warned that continued restrictions on Gulf oil supply and rapid depletion of commercial inventories could lead to higher oil prices and reduced demand. The IEA reported that crude oil shipments through the Strait of Hormuz have fallen by 13.1 million barrels per day compared to pre-war levels, now at 7.6 million barrels daily.

Rekt Capital analyst noted that Bitcoin's ability to break above the $82,000 resistance level will be critical, cautioning that failure could lead to a double rejection pattern similar to May's failed rebound. Glassnode reported that Bitcoin has once again surpassed the 'true market mean' average acquisition cost of $76,660, indicating a return to bullish territory, while Bitcoin corporate treasury average acquisition cost stands at $85,000.