The price of bitcoin has fallen on Tuesday, failing to sustain its position above $79,000 for the third time in eight sessions, thereby establishing this level as a key range. On Tuesday morning, bitcoin was trading at $76,923, marking a 2.4% decline over the past 24 hours, after reaching $79,399 on Monday and subsequently reversing its gains. Other major cryptocurrencies such as ether, XRP, solana, and BNB have 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 only exceptions among the top 10 tokens were TRON and DOGE. The surge in Brent crude oil prices, which rose 1% to over $109 a barrel, extending its rally to a seventh consecutive day, has been attributed to the failure of Iran's interim proposal to reopen the Strait of Hormuz. The White House has stated that US officials are reviewing the latest Iranian proposal while maintaining their 'red lines' on any deal to end the eight-week conflict.
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 approximately 159 per dollar. Market analysts have presented two contrasting views on the bitcoin market. Mike Novogratz of Galaxy Digital noted that the return of US retail investors, combined with institutional capital and limited supply, creates a strong foundation for further upside.
Data from Santiment revealed that whales have accumulated over 40,000 BTC in the past two weeks, and the firm observed a significant shift in sentiment from fear to fear of missing out. In contrast, Ki Young-Ju, the founder of CryptoQuant, argued that bitcoin's push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained spot demand, leaving the market vulnerable to a reversal once the squeeze exhausts. Funding rates on perpetual futures across major exchanges remain negative, 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 simultaneously with the rally toward $79,000 being 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 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, the latest in a series of yen-denominated debt deals used to build one of the largest corporate bitcoin treasuries outside the US.
The upcoming week's catalysts include the Federal Reserve's policy decision on Wednesday, with traders anticipating a higher likelihood of a rate cut after the Justice Department closed its probe into Fed Chair Jerome Powell. The earnings reports from megacap tech companies such as Alphabet, Microsoft, Amazon, Meta, and Apple, which represent roughly a quarter of the S&P 500's market capitalization, may also serve as a catalyst to push bitcoin past $80,000.
Without such a catalyst, the rejection from this level may define the upper end of the range rather than precede a breakout.