Senate Democrats submitted a counterproposal to the CLARITY Act just hours before Tuesday's procedural vote, effectively stalling the legislation. The move follows concerns over ethics provisions, with the crypto market sliding back to $2.65 trillion amid growing uncertainty about the bill's passage.

Legislative Standoff

Democrats negotiated their position in Minority Leader Chuck Schumer's office on Monday evening. Sen. Mark Warner (D-VA) confirmed the development upon exiting the meeting, while Sen. Raphael Warnock (D-GA) indicated Republicans would receive the counterproposal that night.

Sen. Adam Schiff (D-CA) argued that the latest Republican text fails to adequately cover the first family and contains excessive carveouts. He stated the ethics language does not go far enough in its current form.

In response, Sen. Cynthia Lummis (R-Wyo.) asserted that Democrats have already secured over 120 wins and a majority of their ethics requests. She called for an immediate vote to pass the bipartisan bill, stating the time for negotiation is over.

Pro-XRP lawyer John Deaton predicted this outcome two months ago, suggesting Democrats would block President Donald Trump regardless of concessions. Deaton wrote that Democrats would obstruct Trump "even if America was burning," implying political opposition outweighs legislative progress.

Market Reaction

The total crypto market capitalization sits at $2.65 trillion, roughly matching levels from May when prediction markets assigned a greater than 75% chance of the CLARITY Act passing. FxPro chief market analyst Alex Kuptsikevich noted the market appears to be adjusting to life without the legislation.

The market briefly touched $2.71 trillion on Tuesday before declining as Democrats tabled their counterproposal. Polymarket currently prices the odds of the bill becoming law in 2026 at around 18%.

Uniswap and Stellar led gains with increases of over 5% each. XRP added nearly 2%, while Filecoin dropped roughly 11% as the day's worst performer.

XRP (CRYPTO: XRP) broke above the $1.38 resistance level on Monday, rising 4% over the past 24 hours to reach $1.40. The move followed a buildup of short liquidations totaling $2.79 million, according to Coinglass data.

Technical Setup And Support Levels

Crypto chart analyst Ali Martinez identified a breakout setup on Sept. 13, marking $1.31-$1.35 as key support and $1.38 as the breakout threshold. With XRP clearing that resistance, Martinez noted that a sustained close above $1.38 would confirm the move.

Another analyst, Cryptoinsightuk, highlighted $1.29 as an important daily support level, with additional liquidity near $1.26. On the hourly chart, liquidity pockets around $1.49 and $1.55 serve as potential targets if XRP holds support and shorts face further squeezes.

Open Interest And Liquidity Targets

Despite the price gain, open interest dropped from $2.85 billion to $2.83 billion in a single day. This decline raises questions about whether new buying strength is supporting the rally or if momentum may fade.

On the daily chart, a larger liquidity cluster sits between $1.70 and $1.85. Downside risks remain, with liquidity near $0.96 if XRP loses its current structure. However, analysts expect larger overhead liquidity pools to eventually attract price action.