Biggest Bitcoin (BTC) Capitulation in September: Short-Term Holders Shake It Off

As traders responded to the U.S. Senate's failure to advance the CLARITY Act, Bitcoin's most recent decline below $76,000 caused the biggest short-term holder capitulation event in September. The CLARITY Act has not been advanced by the Senate.

Crypto fails in the Senate

In September, the Senate failed to advance the bill pertaining to the structure of the cryptocurrency market, following the failure of a procedural vote to reach the necessary 60 votes. Bitcoin dropped about 4% and momentarily hit an intraday low of $74,900 during the setback, which was accompanied by widespread selling across cryptocurrencies.

Source: Cryptoquant

Newer Bitcoin investors reacted sharply, according to on-chain data. An analysis using data from CryptoQuant claims that short-term holders' total exchange inflows increased from roughly 19,400 BTC to 33,100 BTC. This was the biggest short-term-holder loss realization event of the previous month, with 23,200 BTC being transferred to exchanges at a loss.

Not to be overlooked was the distribution. Kraken reportedly received over 6,000 BTC, significantly more than its usual range of 2,000–3,000 BTC, while over 10,000 BTC moved to Binance. The 7,300 BTC that Coinbase Advanced received was comparatively normal. Such behavior implies that, rather than causing indiscriminate selling among all holders, the sell-off disproportionately put pressure on recently acquired Bitcoin.

Bitcoin's technical picture

In technical terms, Bitcoin is currently trying to stabilize between $75,000 and $76,000. After repeatedly failing to sustain momentum above $80,000, the daily chart displays Bitcoin trading close to $75,959. More significantly, the price has moved back toward the short-term moving average, which is located between $75,500 and $76,000.

Additionally, momentum has declined. During the August rally, the daily RSI approached overbought territory before retreating toward the neutral 50 area. As a result, Bitcoin has little momentum going forward.