Bitcoin bears have built a large pool of short positions above the current price after the U.S. Senate blocked further progress on the Clarity Act.
CoinGlass data shows $4.79 billion in short liquidation leverage above $75,982, nearly 2.5x the $2.05 billion in long-side exposure below that level. This could increase the risk of a short squeeze if Bitcoin starts to recover.
The situation comes after a sudden market selloff following the Senate vote. Bitcoin fell toward $75,000 after the Senate rejected the CLARITY Act, while the wider crypto market recorded heavy liquidations.
Bitcoin Crashes After Regulatory Blow
Notably, the U.S. Senate blocked further progress on the Clarity Act on Tuesday, Sept. 15, after lawmakers voted 49-50 against advancing the bill.
The result left the legislation 11 votes short of the 60-vote threshold needed to proceed. The bill aimed to establish a broad federal regulatory framework for digital assets, making the vote an important event for the crypto market.
Bitcoin fell 4.6% after the vote and dropped below $75,000, while the market recorded about $771 million in total crypto liquidations as traders reacted to the result.
Crypto-related stocks also came under pressure. Coinbase fell more than 8%, Robinhood dropped more than 3%, and bitcoin treasury company Strategy declined 5% during Tuesday’s session. The wider crypto market fell nearly 3% after losses briefly reached 4.2%.
The $4.79 Billion Short Wall Above Current Price
Bitcoin was trading around $75,982 when the CoinGlass 7-day liquidation map showed a large amount of short liquidation leverage overhead. Specifically, from the current price to $83,575, the Bitcoin market faces an accumulation of $4.79 billion in short liquidation leverage.
At $83,575 alone, Binance showed $958.80K in short liquidation exposure. OKX had another $287.09K, while Bybit recorded $3.53 million at the same price.
These exchange figures represent the liquidation exposure at $83,575, not the total exposure across the entire range between $75,000 and $83,000.
However, the cumulative short liquidation leverage from $75,000 to $83,000 reaches $4.79 billion at that price. In simple terms, this represents the amount of short exposure that could face forced closures if Bitcoin continues rising through the range.
The buildup came after Tuesday’s selloff, which has liquidated $174 million in long positions in the past 24 hours, compared with just $37.9 million in shorts. The difference suggests that traders betting on further declines added more short positions after Bitcoin’s drop.
Long Liquidations Face $2B Exposure
Meanwhile, the long-side liquidation data shows a much smaller amount of leveraged exposure below Bitcoin’s current price. From around $75,000 down to $67,861, which marks the lowest price visible on the seven-day chart, cumulative long liquidation leverage stands at $2.05 billion.
At $67,861 alone, Binance shows $2.01 million in long liquidation exposure, while OKX records $1.46 million and Bybit has $2.38 million.
Notably, the overall $2.05 billion figure from $75,000 to $67,861 leaves the total downside liquidation exposure at less than half the $4.79 billion in short exposure above the current price.
Why the Structure Could Backfire on Bears
The large gap between short and long liquidation levels could create conditions for a short squeeze. If Bitcoin gets a positive catalyst, such as a softer Federal Reserve tone on Wednesday, a sustained move toward $79,000 could start forcing short sellers to close their positions.
As these traders buy Bitcoin to exit their shorts, their buying could push the price higher and trigger more short liquidations.
However, there is no guarantee of a revival. Polymarket odds for the CLARITY Act becoming law in 2026 stood at just 17% before the vote and fell further afterward. Bitcoin also faces uncertainty around the Federal Reserve’s rate decision.
Meanwhile, investors may have to wait until after the midterm elections for meaningful progress on the legislation, with some expectations pushing major legislative action as far back as 2029.
