The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the cryptocurrency's price slipping to $76,600 during the US trading session, as geopolitical concerns regained prominence. Following an overnight high near $80,000, its highest level since early February, bitcoin reversed direction, posting a 1.5% decline over 24 hours.
Major alternative cryptocurrencies, including ether, XRP, and solana, followed suit, each dropping around 3%, while the CoinDesk 20 Index, a benchmark for the broader digital asset market, fell 2% on Monday. The pullback is attributed to growing investor caution regarding the outlook for US-Iran negotiations and the ongoing disruption in the Strait of Hormuz, 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 delayed nuclear talks, aims to revive stalled negotiations. However, uncertainty remains elevated after President Trump canceled plans to send envoys to Pakistan for negotiations with the Iranian side over the weekend.
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 edged 0.3% lower in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week featuring major firms like Alphabet, Meta, Microsoft, and Apple. Crypto-linked stocks also 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 in profit have been selling into strength, offsetting fresh demand from ETF buyers and other strategic investors. According to the analysts, the near-term path of least resistance likely involves consolidation or a pullback towards the $75,000 region, and a decisive break above $80,000 is necessary to confirm a more durable bullish trend.