The price of Bitcoin has fallen on Tuesday after failing to sustain its position above $79,000 for the third time in eight sessions, establishing this level as a defining factor in the current range. The cryptocurrency was trading at $76,923 on Tuesday morning, down 2.4% from the previous day after reaching $79,399 on Monday and subsequently reversing. Other major cryptocurrencies such as Ether, XRP, Solana, and BNB have also experienced declines, with losses ranging from 1.8% to 3.9%.
The only exceptions among the top 10 tokens were TRON and DOGE. The rise in Brent crude oil to above $109 a barrel, its seventh consecutive daily increase, was triggered by the failure of Iran's proposal to reopen the Strait of Hormuz. The White House has stated that while discussing the latest Iranian proposal, the US is maintaining its 'red lines' for any deal to end the eight-week conflict. In Asia, the stock market remained relatively stable, supported by the Bank of Japan's decision to keep its policy unchanged.
Two distinct interpretations of the Bitcoin market trend are currently circulating among analysts. According to Mike Novogratz of Galaxy Digital, the return of US retail investors to the market, combined with institutional capital and limited supply, lays the groundwork for further growth.
Data from Santiment indicates that whales have accumulated over 40,000 BTC in the past two weeks, and the firm has noted a significant shift in sentiment from fear to fear of missing out. In contrast, analysis firm CryptoQuant suggests that Bitcoin's push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained spot demand. The firm's founder, Ki Young-Ju, warns that once the squeeze is exhausted, the market may be vulnerable to a reversal. 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 coexist with the rally being front-loaded by short covering. The key test will be whether the next attempt to reach the $79,000 level brings fresh spot bids or exhausts the available 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 has announced a $50 million bond issuance to finance new Bitcoin purchases, adding to its existing corporate Bitcoin treasury.
The upcoming week is expected to bring significant catalysts, including the Federal Reserve's policy decision on Wednesday and major tech earnings from companies like Alphabet, Microsoft, and Apple. Either the Fed's decision or a strong earnings beat could potentially 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.