CLARITY Act Could Pass in Months, Says Former House Financial Chair

VADODARA, February 10, 2026 — The latest crypto news centers on a potential breakthrough in US cryptocurrency regulation. Former House Financial Services Committee Chairman Patrick McHenry stated the CLARITY Act could pass within months. He believes a presidential signature may occur by the end of May. This development follows the recent stablecoin regulation act (GENIUS). Market structure currently reflects Extreme Fear, with Bitcoin trading near $70,249.

Investigation: The CLARITY Act's Legislative Pathway

Patrick McHenry made these statements in an interview with CoinDesk. He emphasized that President Donald Trump has prioritized this legislation. The bill aims to create a comprehensive market structure framework for digital assets. Key contentious points include prohibiting interest payments on stablecoins. DeFi inclusion scope and cryptocurrency classification as commodities or securities are also debated. Ethics rules for public officials remain another sticking point.

McHenry stressed that DeFi cannot be excluded from the bill. He called it fundamental to cryptocurrency efficiency and transparency. The Democratic Party advocates for stronger regulations citing consumer harm and ethical issues. Conversely, the Republican Party and White House are discussing a compromise. This political dynamic creates a narrow window for passage.

Market Context & Historical Precedent

Historically, US regulatory uncertainty has suppressed institutional adoption. The Securities and Exchange Commission's (SEC) enforcement-centric approach created a compliance gray area. Consequently, many projects operated in legal limbo. The CLARITY Act represents a shift toward legislative clarity. It mirrors the 2024 FIT21 Act's attempt to define digital asset markets.

Underlying this trend is a global race for crypto regulatory supremacy. The European Union's MiCA framework already provides a template. In contrast, the US has lagged, creating arbitrage opportunities for offshore exchanges. Passage could realign capital flows toward compliant US venues. This would impact liquidity profiles across major trading pairs.

Related developments in the regulatory include recent efforts to combat security threats, such as the Ethereum Foundation's sponsorship of whitehat team SEAL. Additionally, market movements show a complex interplay, with reports of a Bitcoin sell-off driven by early investors as institutions accumulate, highlighting shifting holder dynamics amid regulatory speculation.

Technical Architecture & Price Action

Market structure suggests the current Extreme Fear reading of 14/100 indicates a liquidity grab. Bitcoin's price action shows it testing the $70,000 psychological level. The 50-day moving average at $72,500 acts as immediate resistance. A Fair Value Gap (FVG) exists between $68,500 and $69,800 from last week's sell-off.

On-chain data from Glassnode indicates increased exchange inflows. This suggests short-term holder distribution. The Volume Profile Point of Control (VPOC) sits at $71,200. A sustained break above this level could trigger a short squeeze. Conversely, failure to hold the FVG support may lead to a test of the 200-day MA at $65,000.

The regulatory news creates a macro Order Block. Traders are positioning for volatility around the May timeline. This aligns with historical Q2 seasonality patterns where regulatory announcements often catalyze trend reversals. The Fibonacci 0.618 retracement level from the 2025 high sits at $67,800, providing a secondary support confluence.

By The Numbers

Why It Matters

Regulatory clarity directly impacts institutional capital allocation. Currently, many asset managers cite regulatory uncertainty as a primary barrier to entry. The CLARITY Act would define jurisdictional boundaries between the SEC and CFTC. This reduces legal overhead for compliant projects. Consequently, it could unlock billions in dormant institutional capital.

Market structure would shift toward regulated venues. Decentralized exchanges might face compliance requirements. This could temporarily reduce DeFi volumes as protocols adapt. However, long-term legitimacy may increase total addressable market. The prohibition of stablecoin interest payments would reshape yield markets. It might push yield generation offshore or into synthetic alternatives.

Expert Commentary

"The CLARITY Act represents the most significant legislative effort to date to provide a coherent framework for digital assets. Its passage would reduce the regulatory arbitrage that has favored offshore exchanges and could catalyze the next wave of institutional adoption. However, the devil is in the details—particularly how DeFi is integrated and whether the commodity/security dichotomy is resolved pragmatically." — CoinMarketBuzz Intelligence Desk

Market Outlook & Price Scenarios

Two primary technical scenarios emerge from current market structure. The first assumes the CLARITY Act progresses smoothly. This could trigger a relief rally as uncertainty dissipates. The second scenario anticipates legislative delays or contentious amendments. This may prolong the current risk-off environment.

• Bullish Invalidation Level: $72,500 (50-day moving average). A daily close above this level with increasing volume would confirm a trend reversal, targeting the previous high near $75,000.
• Bearish Invalidation Level: $68,500 (Fair Value Gap support). A sustained break below this level on elevated volume would invalidate the current consolidation, opening a path toward $65,000 support.

The 12-month institutional outlook hinges on regulatory resolution. Passage could establish a foundation for the next bull cycle. It would enable traditional finance infrastructure integration. This aligns with the 5-year horizon where regulatory maturity often precedes mainstream adoption cycles. Failure to pass may extend the current consolidation phase. It could exacerbate capital flight to jurisdictions with clearer rules.