The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the cryptocurrency's price slipping to $76,600 during the US trading session as geopolitical concerns regained prominence. Following an overnight trade near $80,000, its highest level since early February, bitcoin reversed direction, posting a 1.5% decline over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, each dropped 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 US-Iran negotiations and the ongoing disruption to the Strait of Hormuz, a critical global oil transit route.
A proposal by Iran to cease attacks on ships in the strait in exchange for a comprehensive end to the war, including the lifting of the US naval blockade and a delay in nuclear talks, aims to revive stalled negotiations. However, uncertainty persists after President Trump canceled the dispatch of envoys to Pakistan for negotiations with the Iranian side. Oil prices continued their ascent, with Brent crude oil climbing over 3% to $107 per barrel and West Texas Intermediate crude oil rising 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 companies like Alphabet, Meta, Microsoft, and Apple. Meanwhile, stocks linked to the crypto sector declined across the board, with Coinbase, Circle, and Galaxy Digital posting declines of 1.5%, 3.5%, and nearly 6%, respectively. Underlying bitcoin's price action is a market struggling to gain momentum despite robust institutional demand. Bitfinex analysts observed that short-term bitcoin holders in profit have been selling into strength, offsetting fresh demand from ETF buyers and investment strategies.
The analysts noted that the path of least resistance in the near term is likely consolidation or a pullback towards the $75,000 region, adding that a decisive break above $80,000 is required to confirm a more sustainable bullish trend.