Coinbase Withdrawal Threatens Crypto Market Bill Passage, TD Cowen Warns

VADODARA, January 15, 2026 — Coinbase's strategic withdrawal of support for the CLARITY Act has created a critical Fair Value Gap in regulatory certainty, potentially derailing the crypto market structure bill during the current legislative session according to TD Cowen analysis. This daily crypto analysis examines how this development threatens to prolong the regulatory uncertainty that has suppressed institutional adoption since the 2023 SEC enforcement actions.

Market Context & Background

The CLARITY Act represents the most significant legislative attempt to establish clear digital asset classification since the 2022 Lummis-Gillibrand framework. Market structure suggests regulatory clarity functions as a liquidity catalyst, with historical data from the SEC.gov enforcement timeline showing correlation between regulatory actions and capital flow disruptions. Underlying this trend is the fundamental market need for defined compliance parameters, particularly for custody solutions and exchange operations. The current legislative push follows three failed attempts at comprehensive crypto regulation since 2024, creating what technical analysts would identify as a persistent Order Block at the regulatory resistance level.

What Happened?

According to the TD Cowen analysis reported by CoinDesk, Coinbase formally withdrew its support for the CLARITY Act this week, citing concerns about potential amendments that could disadvantage crypto companies. Jaret Seiberg, a managing director at TD Cowen, warned that this move could prevent the bill's passage during the current session. Consequently, the Senate hearing previously scheduled for January 15 has been postponed indefinitely. Market analysts share this concern, fearing that without Coinbase's institutional weight, the bill could be amended in ways less favorable to the crypto industry, potentially creating what on-chain forensic data would classify as a regulatory Liquidity Grab scenario.

Technical Analysis & Price Action

Market structure suggests regulatory developments create immediate price action catalysts, with Bitcoin currently trading at $96,580 despite the negative regulatory sentiment. The critical Bullish Invalidation level sits at $92,000, representing the 50-day moving average and Fibonacci 0.618 retracement from the December rally. Should regulatory uncertainty intensify, this level would likely be tested as institutional capital re-evaluates deployment timelines. Conversely, the Bearish Invalidation level remains at $101,500, where sustained trading above this threshold would indicate market indifference to regulatory developments. The current RSI reading of 58 suggests neutral momentum despite the Greed Index showing 61, creating what volume profile analysis would identify as sentiment divergence.

By The Numbers

Why It Matters

For institutional investors, regulatory uncertainty represents a fundamental risk parameter affecting capital allocation models. Without clear classification guidelines from legislation like the CLARITY Act, custody solutions remain legally ambiguous, potentially suppressing what on-chain data indicates should be increasing institutional inflows. Retail traders face increased volatility as regulatory headlines create sentiment-driven price swings, disrupting technical patterns and increasing slippage costs. The prolonged uncertainty could delay the implementation of critical infrastructure like standardized reporting requirements and tax treatment clarity, creating friction in market efficiency.

Community Sentiment

Market analysts express concern that Coinbase's withdrawal creates a power vacuum in legislative advocacy. "Without industry consensus, amendments could create compliance burdens that smaller exchanges cannot bear," noted one regulatory expert on X. This sentiment reflects broader anxiety about regulatory capture by traditional financial institutions seeking to impose legacy frameworks on digital asset markets. The postponement of the Senate hearing suggests legislative momentum has stalled, potentially pushing any comprehensive regulation into the next congressional session.

Price Prediction / Future Outlook

Bullish Case: Should alternative industry advocates fill the advocacy void left by Coinbase, the CLARITY Act could still pass with favorable amendments. Historical cycles suggest regulatory clarity typically precedes institutional capital inflows, potentially driving Bitcoin toward the $110,000 resistance level. Market structure would interpret this as breaking the regulatory Order Block that has suppressed valuations since 2023.

Bearish Case: If legislative efforts completely stall, regulatory uncertainty could extend through 2026, suppressing institutional participation. Technical analysis indicates this scenario would likely test the $92,000 support level, with a break below potentially triggering a cascade toward $85,000 as risk models adjust to prolonged ambiguity. This would represent what volume profile analysis would classify as a regulatory-driven Gamma Squeeze to the downside.