Since the close of US markets on Monday, Bitcoin (BTC) has faced pressure, with South Korea's KOSPI index leading declines across Asian stock markets, sending a risk-off signal to the cryptocurrency market.

BTC has fallen from near $65,000 to $63,200, a drop of 2.7%. This decline has spread to the broader crypto market, dragging down assets like Ethereum (ETH), Ripple (XRP), and Solana (SOL). The move ends the brief resilience shown earlier in the trading day, when the market was already under pressure from a sharp drop in the stock price of Nasdaq-listed NVIDIA (NVDA).

The Senate has put the CLARITY Act on hold to prioritize legislation on Russian sanctions, making a vote on the highly anticipated bill—which is touted as providing regulatory clarity and unlocking massive institutional buying potential for digital assets—unlikely before next week. This leaves only a few days before the August 8 recess.

Asian stock markets suffered heavy losses, with South Korea's KOSPI index crashing 10% to its lowest level since mid-April. The index has now fallen 25% from its mid-June highs. In this latest sell-off, heavyweight stocks like Samsung and SK Hynix posted significant losses. InvestingLive commented, "The market's enthusiasm for chipmakers, which was a key driver of the Korean bull market, is currently fading."

Bitcoin (BTC) has historically shown some correlation with stock market volatility, but this relationship is not as straightforward as commonly believed. "When market stress stems from macroeconomic and [interest rate] factors, BTC moves in tandem with the stock market. However, when the stress originates from stock market-specific risks, the two become decoupled. Bitfinex analysts stated in a report to CoinDesk that the debate over earnings and capital expenditure fits this scenario, so the correlation based on this data is likely overestimated."

Looking ahead, Wednesday and Thursday could be significant drivers of market moves, increasing volatility across asset classes. The Federal Reserve will decide on interest rates on Wednesday, followed by key data releases on Thursday. "The Fed decides on rates Wednesday, followed by core PCE and GDP data on Thursday. This makes Wednesday through Thursday the highest volatility window for the repricing of US interest rates this week," said Nexo analyst Dessislava Ianeva.