The price of Bitcoin has fallen on Tuesday after it failed to sustain its position above $79,000 for the third time in eight sessions, establishing this level as a defining factor in the current range. On Tuesday morning, Bitcoin was trading at $76,923, down 2.4% from the previous day, after reaching $79,399 on Monday and then reversing its gains.
Other major cryptocurrencies such as Ether, XRP, Solana, and BNB also experienced significant declines, with Ether dropping 3.7% to $2,290, XRP slipping 3.2% to $1.39, Solana falling 3.9% to $84.10, and BNB declining 1.8% to $625. Among the top 10 tokens, only TRON and DOGE avoided trading in the red over the past 24 hours.
The rise in Brent crude oil prices to above $109 a barrel, marking a seventh consecutive day of gains, was attributed to the failure of Iran's proposal to reopen the Strait of Hormuz. The White House indicated that U.S. officials were reviewing the proposal while maintaining their stance on key issues. The MSCI Asia Pacific Index remained relatively stable, with Japanese stocks benefiting from the Bank of Japan's decision to keep its policy unchanged, leading to a 0.3% strengthening of the yen against the dollar.
Market analysts are considering two possible interpretations of the Bitcoin market trends. Mike Novogratz of Galaxy Digital believes that the return of U.S. retail investors, combined with institutional capital and limited supply, creates a solid foundation for further growth. Data from Santiment shows that whales have accumulated over 40,000 BTC in the past two weeks, and the firm notes a significant shift in sentiment from fear to fear of missing out.
In contrast, CryptoQuant's founder Ki Young-Ju argues that the recent push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained demand, making the market vulnerable to a reversal once the squeeze is exhausted. The negative funding rates on perpetual futures across major exchanges, currently at -0.13% per Coinglass, suggest that shorts are still paying longs to hold positions, a pattern that often precedes both short squeezes and their unwinding. These two views are not mutually exclusive, as spot demand from retail and institutions can coexist with a rally driven by short covering. The key test will be whether the next attempt to reach $79,000 brings fresh spot bids or if it relies on squeezing out remaining shorts.
Corporate accumulation of Bitcoin continues, with Strategy purchasing $3.9 billion worth of Bitcoin in April, its largest monthly accumulation in a year. Japanese company Metaplanet announced a $50 million bond issuance to finance new Bitcoin purchases, adding to its existing bitcoin treasury.
The upcoming Federal Reserve policy decision on Wednesday and major tech earnings reports from companies like Alphabet, Microsoft, Amazon, Meta, and Apple may serve as catalysts for Bitcoin's price movement, potentially pushing it past $80,000 if the Fed decides to cut rates or if the earnings reports exceed expectations.