The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the cryptocurrency's price declining to $76,600 during the US trading session, as concerns over geopolitical instability resurfaced. After reaching its highest level since early February, near $80,000, bitcoin reversed direction, posting a 1.5% decline over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, followed suit, each dropping around 3%, while the CoinDesk 20 Index, a benchmark for the broader digital asset market, fell 2% on Monday.
The pullback is attributed to growing investor caution regarding the outlook for US-Iran negotiations and the ongoing disruption to the Strait of Hormuz, a crucial global oil transit route. A recent proposal by Iran to halt attacks on ships in the strait in exchange for a full end to the war, including the lifting of the US naval blockade and delayed nuclear talks, aims to restart stalled negotiations.
However, uncertainty remains high after President Trump canceled plans to send envoys to Pakistan for negotiations with the Iranian side. Oil prices continued their ascent, with Brent crude oil prices rising over 3% to $107 a barrel and West Texas Intermediate crude oil increasing 2.6% to $97. The Nasdaq declined 0.3% in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week featuring major firms such as Alphabet, Meta, Microsoft, and Apple. Meanwhile, stocks linked to cryptocurrencies declined across the board, with Coinbase shares falling 1.5%, Circle dropping 3.5%, and Galaxy Digital sliding nearly 6%.
Underlying bitcoin's price action is a market struggling to gain momentum despite strong institutional demand. Bitfinex analysts observed that short-term bitcoin holders who are in profit have been selling into strength, offsetting new demand from ETF buyers and other investors. According to the analysts, the most likely near-term scenario is consolidation or a pullback towards the $75,000 region, and a decisive break above $80,000 is required to confirm a more durable bullish trend.