The price of bitcoin has fallen on Tuesday after failing to maintain its position above $79,000 for the third time in eight sessions, establishing this level as a defining factor in its current range. On Tuesday morning, bitcoin was valued at $76,923, representing a 2.4% decline over the past 24 hours, following a climb to $79,399 on Monday. Other notable cryptocurrencies such as ether, XRP, solana, and BNB also experienced significant declines, with ether falling 3.7% to $2,290, XRP slipping 3.2% to $1.39, solana dropping 3.9% to $84.10, and BNB declining 1.8% to $625. The top 10 tokens all traded in the red over the past 24 hours, with the exception of TRON and DOGE.
Meanwhile, Brent crude oil rose 1% to above $109 per barrel, extending its rally to a seventh day after Iran's proposal to reopen the Strait of Hormuz failed to make progress over the weekend. The MSCI Asia Pacific Index remained relatively unchanged, with Japanese stocks receiving support from the Bank of Japan's decision to maintain its policy unchanged. The yen strengthened 0.3% to around 159 per dollar. Two prevailing views are circulating among market analysts regarding bitcoin's recent price movements.
Mike Novogratz of Galaxy Digital believes that the return of U.S. retail investors to the market, combined with institutional capital and limited supply, creates a foundation for further upside potential.
Additionally, data from Santiment shows that whales have accumulated over 40,000 BTC in the past two weeks, and the firm has noted a significant shift in sentiment from fear to fear of missing out. In contrast, analysis firm CryptoQuant takes a more pessimistic view, suggesting that bitcoin's push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained spot demand. According to CryptoQuant's founder, Ki Young-Ju, large-scale short covering leaves the market vulnerable to a reversal once the squeeze exhausts.
Funding rates on perpetual futures across major exchanges remain negative on a 7-day basis, indicating that shorts are still paying longs to hold positions, a pattern that historically precedes both squeezes and the unwinding of squeezes. These two views are not mutually exclusive, as spot demand from retail and institutions can return at the same time as the rally toward $79,000 was front-loaded by short covering. The key test will be whether the next attempt at this level brings fresh spot bids or runs out of shorts to squeeze.
Corporate accumulation of bitcoin continues, with Strategy buying $3.9 billion of bitcoin in April, the firm's largest monthly accumulation in a year. Japanese company Metaplanet announced a $50 million bond issuance on Tuesday to finance new bitcoin purchases, the latest in a series of yen-denominated debt deals used to build one of the largest corporate bitcoin treasuries outside the U.S.
The week's catalysts are expected to arrive on Wednesday and Thursday, with the Federal Reserve announcing its policy decision on Wednesday and megacap tech earnings from major companies such as Alphabet, Microsoft, Amazon, and Meta on Wednesday and Apple on Thursday. Either the Fed or a strong earnings beat could be the catalyst to push bitcoin past $80,000, but without one, the rejection from this level starts to define the upper end of the range rather than precede a breakout.