The price of bitcoin has fallen on Tuesday after failing to sustain levels above $79,000 for the third time in eight sessions, with this threshold now serving as a defining point for the cryptocurrency's range. On Tuesday morning, bitcoin was trading at $76,923, down 2.4% from the previous day, having reached $79,399 on Monday before reversing its gains. Other major cryptocurrencies also experienced 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.
Meanwhile, Brent crude rose 1% to over $109 per barrel, extending its rally to a seventh consecutive day, following the failure of Iran's proposal to reopen the Strait of Hormuz. The White House indicated that US officials were discussing 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 keep its policy unchanged, and the yen strengthening 0.3% to around 159 per dollar. Market analysts are presenting two distinct interpretations of the bitcoin market. Mike Novogratz of Galaxy Digital noted that US retail investors have returned to the market, and the combination of retail demand, institutional capital, and limited supply provides a foundation for further growth.
Data from Santiment shows that whales have accumulated over 40,000 BTC in the past two weeks, with the firm highlighting a significant shift in sentiment from fear to fear of missing out. In contrast, CryptoQuant's founder Ki Young-Ju argued that bitcoin's push above $79,000 was primarily driven by a short squeeze in the derivatives market, rather than sustained spot demand, and that large-scale short covering leaves the market vulnerable to a reversal once the squeeze is exhausted. Funding rates on perpetual futures across major exchanges remain negative on a 7-day basis, 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 is 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 the cryptocurrency 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 week's catalysts are expected to arrive on Wednesday and Thursday, with the Federal Reserve announcing its policy decision on Wednesday, and megacap tech earnings from major companies representing roughly a quarter of the S&P 500's market capitalization.
Either the Fed or a strong earnings beat could serve as a catalyst to push bitcoin past $80,000, and without one, the rejection from this level may define the upper end of the range rather than precede a breakout.