Crypto’s Dog Days

The ancient Greeks believed the summer heat was caused by a star.

The Greeks noticed that the warmer temperatures coincided with the star Sirius appearing on the horizon. Sirius is the brightest star in the sky, and it was thought to have contributed to the sweltering heat.

The star is also part of the constellation Canis Major (Big Dog). And thus, we get the expression “dog days of summer.” The expression is usually associated with lethargy, like a dog lounging on a porch under the oppressive heat.

Lethargy, oppressive heat—that about sums up the state of crypto right now.

Let me show you what I mean…

The Meeting That Wasn’t

Last Friday was supposed to be consequential…

The Securities and Exchange Commission (SEC) was expected to hold an open meeting on Friday, August 14, 2026.

The agenda was to vote on rules tailored for digital assets.

These included items related to an innovation exemption for tokenized stocks. Fundraising exemptions to allow crypto startups to more easily raise capital were on the table. And new rules related to investment contracts for crypto assets were also part of the agenda.

The scheduled meeting came on the heels of the U.S. Senate failing to bring the CLARITY Act to a vote before the long August recess.

The bill will be on the back burner until the middle of September. And that means any catalyst for the industry related to CLARITY will have to wait.

That’s why the SEC was set to be so interesting…

Regulators pursuing Project Crypto, an initiative to bring finance onto public blockchains, refused to sit idle during the recess. They viewed the five weeks as a way for the White House, SEC, and CFTC to support the industry…without waiting around for Congress.

But the meeting was postponed. No new date was set.

The supposed reason was an unforeseen scheduling issue. And that might be the case. But reading between the lines…

It tells us that this meeting was a response to what happened in the Senate. It was not a meeting that was planned well in advance. Why else would there be a scheduling conflict less than 24 hours before the meeting?

Another possibility…

After the postponement, we learned that the innovation exemption—the rule relating to tokenized stocks trading 24/7 onchain—is now expected to be delayed until CLARITY is finished. That made the innovation exemption a focal point for legacy exchanges—the NYSE, Nasdaq, etc.

The delay means one of two things…

Either the SEC is becoming more optimistic that CLARITY is going to pass when the Senate reconvenes in September…

Or the lobbyists for the New York Stock Exchange, Nasdaq, and the Depository Trust & Clearing Corporation (DTCC) are all up in arms…and managed to spike the meeting.

I lean toward the latter.

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Crypto’s Boogeyman

Readers might recall that the last time the SEC attempted to issue an innovation exemption on tokenized stocks, the incumbents pushed hard to quash it. We covered that story in A Selfish Motto Returns.

That’s why I wouldn’t be surprised if they did it again. The legacy financial system is quite the force.

The Chicago Mercantile Exchange has been relentless in pushing back against regulators. We might recall in The Other D.C. Cage Match that CEO Terry Duffy was furious with perpetual futures getting a green light from regulators.

Source: CNBC

Duffy’s now hired senior policy counsel tied to the former SEC chair, Gary Gensler. Gary was notorious for enforcement actions against the digital asset industry. If digital assets have a boogeyman, it’s probably Gary Gensler.

And the fact that CME hired his former counsel shows you how fierce the fighting is.

It also suggests the SEC is receiving a lot of heat from the very exchanges that stand to lose market share if stocks become tokenized and are tradeable onchain 24/7.

The postponement without a rescheduling hints that something is happening behind the scenes. Good or bad—we just don’t know yet.

And while we wait to find out, it’s worth looking at how the market is behaving.

The Market’s Delay

The price of Bitcoin continues to trade sideways on the heels of CLARITY’s delay and the SEC’s postponement last Friday.

While investors would prefer a bull run, sideways price action could be interpreted as optimistic. It means that price isn’t reacting to the wave of negative news coming out of Washington, D.C.

We covered this last week in First Signal’s ETF Buyers Aren’t Waiting on CLARITY.

The market, in essence, is treading water. And it likely will continue for some time. That’s because the catalysts on the horizon are just that—on the horizon.

Meanwhile, volume and open interest across the crypto market are hitting annual lows. The combination suggests there isn’t a lot of attention on crypto. The market was primed for a move, but the needed catalyst has simply disappeared.

Not great. Not terrible. That’s about where things stand.

For that to change, we’d need to see a little momentum build this week. In terms of what that momentum would look like…

Bitcoin has made a series of noteworthy rejections at moving averages since last year. These rejections have led to nearly a year of negative price action.

Price was rejected hard at the 50-day moving average (dMA), 100 dMA, and the 200 dMA. We can see those in the chart below.

We are now waiting to see if price can do the opposite and reclaim those levels. It’s currently trading right along the 50-dMA. But we need more.

The 100 dMA sits around $66,500, and we need to see if Bitcoin can overcome this level in the coming days to consider whether momentum is on our side.

Which is to say…

We need patience…perhaps a lot of it.

There’s no mention of the SEC meeting being rescheduled. The Senate won’t meet for almost a month. But there is one bright spot.

In the August 12 write-up titled Why the Market Is Bullish Without CLARITY, we discussed the importance of Bitcoin’s halving.

We are more than halfway between the prior halving and the next halving. Historically, it’s a period where the market has—or nearly has—bottomed out.

Whether the bottom is in or right around the corner, that’s the point of these moving averages. If we gain momentum this week, the bottom could be behind us. If not, we could see a return to recent lows.

Time will tell.

But the fact that price isn’t responding negatively to bad news suggests that sellers are running out of ammo. And any positive momentum or catalysts could prompt a knee-jerk reaction higher.

For now, the market muddles. The regulators kick the can. And investors wait for something—anything—to happen.

But keep the faith.

After all, the dog days only last for so long.

Until next time…

Your Pulse on Crypto,

Ben Lilly
Editor, Chain of Thought