The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the cryptocurrency's price dropping to $76,600 during the US trading session, as concerns over geopolitical tensions resurfaced. Following an overnight high near $80,000, its highest point since early February, bitcoin reversed direction, declining around 1.5% over the past day. Major alternative cryptocurrencies, including ether, XRP, and solana, also fell, each losing approximately 3%, while the CoinDesk 20 Index, a benchmark for the broader digital assets market, decreased about 2% on Monday. The pullback occurs as investors become increasingly cautious about the prospects of US-Iran negotiations and the ongoing disruption to the Strait of Hormuz, a critical global oil transit route.
A recent proposal by Iran to cease attacks on ships in the strait in exchange for a complete 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 remains high after President Trump canceled plans to send envoys to Pakistan for talks with the Iranian side.
Oil prices continued their ascent, with Brent crude oil rising over 3% to $107 a barrel and West Texas Intermediate crude oil increasing 2.6% to $97. The Nasdaq fell 0.3% in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week featuring firms like Alphabet, Meta, Microsoft, and Apple.
Meanwhile, stocks linked to the crypto sector declined, with Coinbase shares falling 1.5%, Circle dropping 3.5%, and Galaxy Digital sliding nearly 6%. Underlying bitcoin's price movement is a market struggling to gain momentum despite robust institutional demand. Bitfinex analysts observed that short-term bitcoin holders are selling into strength, offsetting fresh demand from ETF buyers and other investors. According to the analysts, the most likely near-term path 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.