The brief surge of bitcoin towards $80,000 lost steam on Monday, with the cryptocurrency's price retreating to $76,600 during the US trading session, as concerns over geopolitical tensions resurfaced. Following an overnight high near $80,000, its highest level since early February, bitcoin reversed direction and fell approximately 1.5% over the past 24 hours. Major alternative cryptocurrencies followed suit, with declines of around 3% for ether, XRP, and solana, while the CoinDesk 20 Index, a benchmark for the broader digital asset market, dropped about 2% on Monday.
The pullback is attributed to growing investor caution regarding the outlook for US-Iran negotiations and the ongoing disruption to the Strait of Hormuz, a critical global oil transit route. A 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 restart stalled negotiations, although uncertainty remains high after President Trump canceled the planned dispatch of envoys to Pakistan for negotiations with the Iranian side. Oil prices continued their ascent, with Brent crude oil prices 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 such as Alphabet, Meta, Microsoft, and Apple.
Meanwhile, stocks linked to the crypto sector declined across the board, with shares of crypto exchange Coinbase falling 1.5%, Circle dropping 3.5%, and Galaxy Digital sliding nearly 6%. Underlying bitcoin's price action is a market struggling to build momentum despite strong institutional demand. According to Bitfinex analysts, short-term bitcoin holders who are in profit have been selling into strength, offsetting fresh demand from ETF buyers and other strategies. The analysts note that the path of least resistance in the near term is likely consolidation or a pullback toward the $75,000 region, adding that a decisive break above $80,000 is required to confirm a more durable bullish trend.