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Bitcoin Climbs on CLARITY Act Optimism and ETF Demand

Published:

$77K remains critical support as RSI points to pullback risk

Crypto markets posted steady gains throughout the early part of the week, and Bitcoin climbed above $82K before retreating to the $80K area. The Middle East conflict remained in the headlines, with hopes of a peace deal pushing risk assets higher. Bitcoin was also supported by strong institutional demand and improving sentiment tied to progress on the CLARITY Act.

The biggest friction point between the banking industry and crypto firms was stablecoin yield, and it looks like a compromise is within reach. Crypto firms would not be able to offer rewards to customers simply for holding stablecoins, but could reward them for actions like trading or spending. The bill could move closer to a Senate floor vote later this month.

The positive regulatory developments coincided with another strong week for spot Bitcoin ETFs. According to data from Coinglass, more than $1.5 billion worth of inflows were registered since the beginning of May, signaling increased institutional demand and risk appetite.

However, risk appetite may still be dampened by the Fed’s “higher for longer” rate stance and the ongoing conflict between the US and Iran. Both the US and Iran are still blockading the Strait of Hormuz, but according to some, Iran is evaluating a US proposal to lift the blockade and end the war.

Later today, the always-important Non-Farm Payrolls report will come out, showing the state of the US labor market. At the time of writing, the chances of a rate cut in 2026 are almost nonexistent, but if labor market conditions in the US deteriorate, rate cut expectations could increase.

Chart Analysis – BTC/USD

Bitcoin pulled back from highs above $82K, but the overall price action structure remains strong. The bullish trend line has pushed the price higher since mid-April, but the last few candles have shown long wicks in the upper part, suggesting hesitation and a potential short-term pullback.

The RSI is coming down after barely touching the overbought level, which supports the idea of a bearish pullback. The $77K area now acts as the first important support zone. A clean break below this region could trigger a deeper correction toward $74K. On the upside, the recent high above $82K remains the key resistance. A break above it would likely trigger renewed bullish momentum and open the door for a move toward the $85K region.

For now, Bitcoin’s direction will depend more on geopolitical factors and developments regarding the Clarity Act, rather than purely technical factors.