Bitcoin, Ethereum, and Dogecoin traded unchanged on Friday, while XRP dipped 2% to $1.01, as market participants reacted to the delay of the CLARITY Act vote until September. The postponement of the legislation, which aims to establish clear U.S. crypto rules, has created a period of regulatory uncertainty, though major assets remained stable. This stability comes despite significant liquidations in the derivatives market, with Coinglass data showing that 76,590 traders were liquidated for $201.31 million in the past 24 hours.

The CLARITY Act’s progress stalled due to procedural delays, prompting Senator Cynthia Lummis (R-Wyo.) to express frustration while vowing to continue pushing for its passage. Lummis argued the bill is essential for protecting consumers from scams and providing law enforcement with tools to target bad actors. She stated that lawmakers have "come too far to quit now" and declared that the "fight is far from over." Despite the legislative setback, experts suggest that Bitcoin and Ethereum markets are not significantly impacted by the delay, viewing it as a temporary hurdle rather than a fatal blow to the bill.

Institutional demand remains robust, with SoSoValue data revealing net inflows of $128.7 million into spot Bitcoin ETFs on Thursday. Spot Ethereum ETFs also saw positive momentum, recording net inflows of $92.2 million. These inflows contrast with the mixed signals from whale activity. According to CryptosBatman, wallets holding over 10,000 BTC have been selling for three consecutive months, while holders of 1,000–10,000 BTC remain neutral. However, smaller whale wallets holding 100–1,000 BTC have steadily accumulated, helping overall whale holdings recover to 3.06 million BTC from 2.87 million in December 2025.

Market sentiment remains divided among analysts. Trader Gum noted that Bitcoin is closely repeating its previous bear-market cycle, predicting a potential mid-August grind higher followed by a prolonged decline. Gum suggested that a revisit of $57,000 could trigger a breakdown to attractive long-term accumulation levels. Conversely, other analysts argue that a bull market is emerging, citing various technical signals. President-elect Donald Trump also weighed in, stating that "crypto is a big deal" and noting that people are increasingly paying with Bitcoin.

What the Numbers Show

The divergence between institutional inflows and retail liquidations highlights a structural shift in market participation. While 76,590 traders faced liquidations totaling $201.31 million, spot ETFs attracted over $220 million in combined net inflows for Bitcoin and Ethereum on Thursday alone. This suggests that institutional investors are accumulating assets during periods of volatility, while leveraged retail positions are being wiped out. Additionally, the accumulation by mid-tier whale wallets (100–1,000 BTC) alongside selling by large whales (>10,000 BTC) indicates a redistribution of holdings rather than a broad-based exit from the asset class.

Bitcoin (CRYPTO: BTC) continues to underperform broader equity markets, failing to participate in a recent rally across global risk assets. Data from on-chain analytics firm Glassnode, shared on Aug. 7, indicates that while U.S. equity indices, European stocks, and gold have moved sharply upward, Bitcoin has largely stood still. This divergence marks a significant departure from Bitcoin’s historical behavior as a high-beta risk asset, where improving sentiment in traditional markets typically triggers comparable crypto rallies.

The cryptocurrency remained slightly below its trading levels from a week earlier, trailing the S&P 500 by more than four percentage points. This lack of volatility is particularly notable given the context of a major self-custody security incident that occurred recently. The incident involved an attacker exploiting a five-year-old key-generation flaw in Coldcard hardware wallets. In roughly 25 minutes during the early hours of July 31, the attacker reportedly drained approximately 594 BTC, worth about $38 million, from roughly 500 wallets.

Despite the severity of the breach, the market reaction was muted. The incident triggered substantial on-chain activity, with holders largely migrating assets into fresh storage rather than liquidating their Bitcoin. More strikingly, spot prices showed little measurable reaction to the forced movement of older supply. This resilience in price, despite significant supply movement, suggests that market participants are not engaging in panic selling.

Institutional demand has weakened sharply, contributing to the price stagnation. Spot ETFs posted record outflows in June, and corporate buying has failed to offset the selling pressure. Despite supportive macro conditions and resilient prices, the absence of aggressive buyers has kept Bitcoin stagnant. Analysts suggest that a rebound in institutional flows remains a key catalyst for a potential bottom.

What the Numbers Show

Bitcoin’s current market structure challenges the traditional template for a cycle bottom. Historically, major bottoms have been accompanied by capitulation, characterized by surging volatility, collapsing prices, and a sharp fall in the percentage of profitable Bitcoin supply. This cycle has reached similar profitability compression without the accompanying volatility explosion. Instead, the adjustment has occurred through months of sideways and declining prices, suggesting Bitcoin may be approaching familiar bottom territory through time-based capitulation and investor boredom rather than a dramatic final flush.

The divergence between price stability and negative flow data indicates a market waiting for a catalyst. With institutional demand weak and retail activity focused on security migration rather than trading, Bitcoin remains decoupled from the broader risk-on environment seen in equities and commodities.