Banks obstruct crypto legislation, is BTC being "drained" or is it gearing up for a breakout? Mike Novogratz provides key breakthrough points.

The crypto market structure bill may be headed for failure. Galaxy CEO Mike Novogratz directly points out the core issue: it’s not party politics, but banking interests blocking progress. At the same time, he highlights a key number for Bitcoin to reaffirm its upward trend — breaking through $100,000 to $103,000. Behind these signals, there is a deep game between crypto and traditional finance, reflecting the current complex market situation.

The Banking Interests War Behind Policy Failure

Stablecoin yields become the focal point of disagreement

According to the latest news, the main reason for the stalled progress of the crypto market structure bill is the inability of all parties to agree on stablecoin yields. This sounds like a technical issue, but in reality, it reflects strong resistance from traditional financial institutions.

The logic of banks is straightforward: current large banks pay very low interest to depositors (about 1-11 basis points), but depositing these funds at the Federal Reserve yields 3.5-4% high returns. This interest rate spread is the primary source of profit for banks. If stablecoins offer higher yields, consumer deposits will flow from banks to crypto platforms, causing banks to lose interest income and forcing them to raise interest payments to compete. This is unacceptable to banks.

Political and Interest Compromises

Mike Novogratz points out that if the bill is rejected, it’s not just a setback for the crypto industry but also a loss for American consumers. However, the reality is that banks are conducting intense lobbying, with support from some legislators, creating a political deadlock. This fully demonstrates that in U.S. politics, the influence of interest groups often outweighs good policy design.

Bitcoin’s Price Dilemma and Key Breakthrough Points

Current Dilemma: Continuous Selling

As of January 21, Bitcoin’s price is $88,994, which is disappointing:

This ongoing decline sharply contrasts with previous optimistic expectations. Mike Novogratz believes this is not just a market sentiment issue but a structural “longs being drained” — seemingly no big drop, but all risks remain, and funding fees continue to eat into longs’ profits.

Breakthrough Point: $100,000 to $103,000

Mike Novogratz’s assessment is that Bitcoin needs to break through $100,000 to $103,000 to reaffirm the upward trend. The importance of this range lies in:

• Psychological barrier: $100,000 is an integer milestone, representing a market confidence boundary
• Technical resistance: $103,000 may be a previous high or a key technical level
• Confirmation signal: only breaking through this range can indicate that bulls have truly regained control

Currently, there is over $10,000 distance to this target, requiring not just a price breakthrough but also a market psychology shift.

Macro Background Warnings

The dollar’s position is accelerating its decline

Another important signal Mike Novogratz mentions is the price of gold. The rise in gold indicates that the US dollar is rapidly losing its reserve currency status — a long-term and profound issue. When dollar confidence declines, investors seek alternative assets — gold, Bitcoin, etc., will benefit.

However, the sell-off in long-term bonds is also not a good sign, reflecting concerns about the US fiscal situation. In this macro context, Bitcoin should perform strongly, but in reality, it is being continuously sold off.

Contradictory On-Chain Data Signals

From the data, contradictory signals are emerging:

• Whales transferred 13,000 ETH (about $41.75 million) into exchanges via Galaxy Digital OTC wallets
• 24-hour liquidations reached $850 million, with $240 million in ETH liquidations
• ETH/BTC experienced a death cross (50-day moving average crossing below the 200-day moving average)

These data points suggest that despite positive news (tokenization, compliance, etc.), actual funds are fleeing or waiting for better prices.

Market Status: Waiting or Fleeing?

According to the latest analysis, the current market state is “stuck but risks remain.” On the surface, there are many positives — Bermuda, NYSE, tokenization, 24/7 trading — but these are not enough to generate new buying interest in the short term. They only create the illusion that “it won’t die,” but are insufficient to push prices “upward.”

This environment of high-level oscillation and persistent funding fees is perfect for draining longs. Bulls are being “chronically drained,” not experiencing rapid crashes. This situation is often more dangerous because participants are unknowingly being consumed.

Summary

The crypto market structure bill faces failure due to banking interests, reflecting deep conflicts between traditional finance and crypto innovation. Bitcoin’s current predicament is not just a simple price decline but a structural depletion of longs. The $100,000 to $103,000 range is a critical breakout point; only surpassing this zone can reaffirm the bullish trend.

On the macro front, the decline of the dollar and bond sell-offs should benefit Bitcoin, but in reality, Bitcoin is being continuously sold off. This contradiction reveals the complex psychology of the market — optimistic about long-term prospects but worried about short-term risks. The key moving forward is whether Bitcoin can break through key price levels supported by policy and macroeconomic factors, reigniting market confidence.