Monday saw a reversal in bitcoin's surge towards $80,000, with the cryptocurrency slipping to $76,600 during the US trading session, as concerns over US-Iran relations and oil price increases resurfaced. Following an overnight peak near $80,000, its highest 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 digital assets market benchmark, fell 2% on Monday.
The downturn is attributed to investor caution regarding US-Iran negotiation prospects and the ongoing Strait of Hormuz disruption, a critical global oil transit route. A recent proposal by Iran to halt 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 plans to send envoys to Pakistan for negotiations with Iran. Oil prices continued their ascent, with Brent crude rising over 3% to $107 a barrel and West Texas Intermediate crude up 2.6% to $97.
The Nasdaq dipped 0.3% in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week featuring tech giants such as 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 action is a market struggling to gain momentum despite robust institutional demand. Bitfinex analysts observed that short-term bitcoin holders are selling their profits, offsetting new demand from ETF buyers and Strategy.
They predict 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 necessary to confirm a more sustained bullish trend.