The market entered a sharper pullback this week after the Senate confirmed that a long-anticipated crypto structure legislation will not advance before the end of the year.
Related Reading: Crypto Market Structure Bill Stalled: Senate Banking Committee Pushes Markup To Early 2026
What many investors had hoped would be a closing act for regulatory clarity in 2025 instead became another extension of uncertainty, triggering risk-off behavior across digital assets and related investment products. The delay arrived at a fragile moment for markets grappling with growing sensitivity to policy signals from Washington.
Bitcoin slid below the $86,000 level, while the broader digital asset market shed roughly $140 billion in capitalization within hours. The total market value has fallen to around $2.93 trillion, its lowest level in several weeks, as traders reassessed regulatory timelines that now extend into early 2026.
BTC's price trends to the downside on the daily chart. Source: BTCUSD on Tradingview
Senate Pushes Crypto Market Structure Talks Into 2026
The Senate Banking Committee confirmed it will not hold a markup hearing on the crypto market structure billbefore Congress adjourns for the holidays.
While committee leadership says bipartisan negotiations are progressing, lawmakers acknowledged that time has run out to move the bill forward in 2025. Chairman Tim Scott’s office reiterated that discussions with Democratic counterparts are ongoing, with a markup now expected in early 2026.
The proposed legislation is designed to clarify how digital assets are regulated in the U.S., including defining the respective roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Under current drafts, the CFTC would oversee spot crypto markets, while securities laws would be more clearly applied to token issuers and intermediaries. Parallel efforts in the Senate Agriculture Committee, which also oversees the CFTC, have yet to reach a markup stage, further slowing the process.
Market Reaction Highlights Fragile Sentiment
The legislative setback quickly translated into market pressure. Bitcoin fell from near $90,000 to the mid-$85,000 range, while Ethereum dropped below $3,000. Additionally, the average crypto RSI fell to around 32, indicating that the market is within oversold territory.
Analysts pointed to elevated derivatives positioning and heavy open interest around key price levels as factors amplifying downside moves. Exchange-traded products reflected the shift, with Bitcoin and Ethereum spot ETFs recording significant outflows as institutional investors reduced exposure.
Some market observers noted that unrealized losses have risen sharply, while funding conditions and leverage remain stretched, making prices more vulnerable to negative catalysts such as policy delays.
Regulatory Uncertainty Persists Despite Agency Actions
Despite the legislative pause, regulators have continued to act within existing frameworks. The SEC has issued staff guidance and hosted public discussions on how current securities laws apply to crypto activities, while the CFTC has taken steps to expand supervised spot market participation.
However, industry participants say these measures fall short of the comprehensive clarity the market structure bill is meant to deliver.
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The Senate’s decision reinforces a familiar pattern for crypto markets: policy delays translating into heightened volatility. With negotiations set to resume in early 2026, investors will be left to navigate another extended period where regulatory questions remain unresolved.
Cover image from ChatGPT, BTCUSD chart on Tradingview
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