Bitcoin ETFs Face $450M Outflow as Senate Vote Triggers Crypto Market Sell-Off
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US Spot Bitcoin ETFs Record Their Heaviest Single-Day Outflow Since June 25
The cryptocurrency market faced renewed selling pressure Tuesday after the US Senate failed to advance the Digital Asset Market Clarity Act, triggering a sharp reaction across major digital assets.
According to SoSoValue, US spot Bitcoin ETFs recorded approximately $450 million in net outflows, marking their largest single-day outflow since June 25.
The Senate vote fell roughly 10 votes short of the 60 required to advance the legislation. Notably, seven Democrats who had participated in months of negotiations also voted against the motion.
đïž Senate Vote Raises Regulatory Uncertainty
The failed vote has intensified uncertainty surrounding the future of US crypto market structure legislation.
The disagreement reportedly centered on ethics provisions concerning officials' potential financial benefits from digital assets. The outcome has cast doubt on the prospects of passing comprehensive market structure legislation in the Senate this year.
Galaxy Digital CEO Mike Novogratz described the setback as 18 months of industry, Democratic and Republican efforts falling apart near the finish line.
đ Regulatory-Sensitive Tokens Bear the Brunt
Bitcoin traded near $75,965, with its price relatively unchanged since midnight UTC after declining following the Senate vote.
The CoinDesk 20 Index remained down less than 0.1% at the time of reporting, following a 4.6% decline on Tuesdayâits steepest drop since June 5.
Several tokens with significant exposure to US regulatory developments experienced sharper losses:
Stellar (XLM): Down 9.6% over 24 hours.
XRP: Down 8.1% over 24 hours.
Bitcoin (BTC): Down 1.7% over 24 hours.
CoinDesk 100: 95 constituents recorded losses.
XRP and other regulatory-sensitive assets had previously benefited from optimism surrounding the legislative push, making them particularly vulnerable to renewed uncertainty.
đ„ $570M in Liquidations Signals Heavy Deleveraging
Market volatility intensified as leveraged traders faced forced liquidations.
More than $570 million in leveraged futures positions were liquidated over 24 hours, according to the reported market data. This represented the largest liquidation event since August 22, although it remained below the major washouts recorded in early February and June.
The taker long-short volume ratio turned bearish, with short positions accounting for approximately 51.5% of market flow.
On Hyperliquid, the trader long/short ratio declined to 2.53 from 2.71, indicating that bullish positioning remained significant despite the market sell-off.
đ Bitcoin Open Interest Rises as Price Falls
One of the most notable derivatives signals was the divergence between Bitcoinâs price and futures open interest.
Bitcoinâs open interest increased to approximately 688,000 BTC from 676,000 BTC while its price declined.
This combination can indicate that new leveraged positions are entering the market, potentially including fresh short positions. However, open interest alone cannot definitively establish whether shorts or longs are being added.
Bitcoinâs negative 24-hour open-interest-adjusted cumulative volume delta also pointed to aggressive market selling.
Meanwhile, perpetual funding rates continued to reflect optimism among some traders, creating a notable divergence between positioning and sentiment.
âïž Options Market Sends Mixed Signals
Bitcoinâs one-week and one-month options skews were reported to be positive and rising, at approximately 5.76% and 6.33%, respectively.
This suggests increasing demand for downside protection, although options positioning can reflect multiple strategies and should not be interpreted as a guaranteed forecast of future prices.
Ether options skews reportedly showed a similar trend.
đ What Comes Next for Crypto Markets?
The failed Senate vote has introduced fresh regulatory uncertainty at a time when leveraged positioning remains elevated and ETF flows have turned negative.
The key factors to watch are:
Whether Bitcoin ETF outflows continue.
How derivatives leverage changes following the liquidations.
Whether regulatory-sensitive tokens recover or face further selling.
Whether policymakers revive negotiations around market structure legislation.
The immediate market reaction highlights the sensitivity of crypto assets to US regulatory developments, while the coming sessions will reveal whether this is a short-term shock or a more sustained shift in market sentiment.
#Bitcoin #BTC #CryptoNew s #BitcoinETF #XRP #Ethereum #DeFi #CryptoMarket #BinanceSquare
Source: SoSoValue, CoinDesk market data, and reported analyst commentary.