The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the cryptocurrency's price slipping back to $76,600 during the US trading session, as geopolitical concerns resurfaced. Following an overnight trading period near $80,000, its highest level since early February, bitcoin reversed its course, experiencing a decline of approximately 1.5% over the past 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, also followed suit, each falling by around 3%, while the CoinDesk 20 Index, a benchmark for the broader digital assets market, dropped about 2% on Monday.
The retreat comes amidst 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 recent proposal by Iran to halt attacks on ships in the strait in exchange for a full end to the war, including the lifting of the US naval blockade and delaying nuclear talks, aims to restart stalled negotiations, although uncertainty remains high. Oil prices continued their ascent, with Brent crude oil prices climbing over 3% to $107 a barrel, and West Texas Intermediate crude oil rising 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.
Meanwhile, stocks linked to the crypto sector declined across the board, with shares of crypto exchange Coinbase falling 1.5%, and those of Circle and Galaxy Digital dropping 3.5% and nearly 6%, respectively. Underlying bitcoin's price action is a market struggling to build momentum despite strong institutional demand. Bitfinex analysts observed that short-term bitcoin holders are selling into strength, offsetting fresh demand from ETF buyers. The analysts noted that the path of least resistance in the near term is likely consolidation or a pullback towards the $75,000 region, adding that a decisive break above $80,000 is required to confirm a more durable bullish regime.