The recent surge in bitcoin's value towards $80,000 was short-lived, as the cryptocurrency's price dipped to $76,600 during Monday's US trading session, with geopolitical tensions and rising oil prices contributing to the decline. After nearing $80,000 overnight, its highest point since early February, bitcoin reversed direction, experiencing a 1.5% drop over 24 hours.
Major alternative cryptocurrencies, including ether, XRP, and solana, also fell by around 3%, while the CoinDesk 20 Index, a benchmark for the broader digital assets market, decreased by 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 crucial global oil transit route.
A Wall Street Journal report revealed that Iran has proposed a ceasefire in exchange for a complete end to the war, including the lifting of the US naval blockade and a delay in nuclear talks. However, uncertainty remains high after President Trump canceled plans to send envoys to Pakistan for negotiations with Iran. Oil prices continued to rise, with Brent crude oil prices increasing by 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 related to cryptocurrencies declined, with Coinbase shares falling 1.5%, Circle dropping 3.5%, and Galaxy Digital sliding nearly 6%. Bitfinex analysts noted that short-term bitcoin holders who are in profit have been selling, offsetting new demand from ETF buyers and other investors. The analysts predict that the near-term path of least resistance 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 durable bullish trend.