Will Bitcoin Bottom At $56,000? CryptoQuant CEO Presents The Data

Coinbase CEO Brian Armstrong has publicly opposed a draft Senate bill concerning cryptocurrency, warning that it poses a threat to decentralized finance (DeFi) and tokenized equities, while also indicating potential overreach by the SEC. Senator Cynthia Lummis has suggested that discussions regarding the bill may be postponed.

Bitcoin trading activity has surged as the CLARITY Act approaches, with market participants positioning for potential new all-time highs. Currently, Bitcoin is trading around $88,100, reflecting a 'bullish neutrality' trend amid significant short liquidations that are exerting upward pressure on prices.

Bitcoin's derivatives market is undergoing a significant reset, with Binance's open interest dropping over 31% from its October peak as futures-led selling pressure diminishes. This decline follows a speculative surge in 2025, where open interest reached an all-time high of over $15 billion. CryptoQuant contributor Darkfost suggests that such a deleveraging phase often coincides with meaningful cycle lows, indicating a potential market bottom.

Bitcoin's recent breakout above $95,000 has sparked renewed interest in the cryptocurrency market, leading to the liquidation of nearly $700 million in short positions. This surge in price reflects a growing risk appetite among investors, with market strategists suggesting that the rally has potential for further gains.

The cryptocurrency market has seen significant fluctuations recently, with Bitcoin's price experiencing volatility, briefly surpassing $90,000 before retreating to test support levels around $85,000. This instability reflects ongoing market uncertainty influenced by macroeconomic factors and Federal Reserve decisions.

Editor’s Note: Staying updated on cryptocurrency developments is crucial for investors and enthusiasts alike. Understanding daily trends can help navigate the volatile market and make informed decisions.

Bitcoin's price has recently experienced a significant drop to approximately $57,000, raising concerns about the sustainability of its recovery above $94,000. Analysts suggest that while a bullish trend may appear imminent, it could ultimately lead to a deeper market correction, as indicated by the Elliott Wave analysis shared by crypto analyst Xanrox.

Coinbase CEO Brian Armstrong has publicly rejected the U.S. Senate Banking Committee's latest draft of the CLARITY Act, arguing that it would worsen the regulatory environment for the cryptocurrency industry in the United States. Armstrong expressed concerns about the bill's implications for crypto operations and innovation.

Bitcoin has shown renewed strength as inflows to spot Bitcoin ETFs have resumed, although analysts question whether the price can reach the $105,000 mark. Recent data indicates a fluctuating market, with Bitcoin's price briefly hitting $90,000 before facing challenges in sustaining this rally.