The price of bitcoin has declined on Tuesday after it failed to sustain its position above $79,000 for the third time in eight sessions, thus establishing this level as a defining factor in the current range. On Tuesday morning, the cryptocurrency was valued at $76,923, representing a 2.4% decrease over the past 24 hours, following its ascent to $79,399 on Monday and subsequent reversal. Other cryptocurrencies such as ether, XRP, solana, and BNB also experienced significant 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 top 10 tokens were all trading in the red over the past 24 hours, except for TRON and DOGE.
Meanwhile, Brent crude oil rose 1% to above $109 per barrel, extending its rally to a seventh consecutive day, after Iran's proposal for an interim deal to reopen the Strait of Hormuz failed to make progress over the weekend. The White House stated that U.S. officials were discussing the latest Iranian proposal while maintaining 'red lines' on any deal to end the eight-week war.
The MSCI Asia Pacific Index remained relatively unchanged, with Japanese stocks supported by the Bank of Japan's decision to keep its policy unchanged. The yen strengthened 0.3% to around 159 per dollar. There are two prevailing views among market analysts regarding the bitcoin market.
Mike Novogratz of Galaxy Digital noted that U.S. retail investors have returned to the market, and the combination of retail demand, institutional capital, and limited supply creates a foundation for further upside.
According to Santiment data, whales have accumulated over 40,000 BTC in the past two weeks, and the firm has observed a sharp shift in sentiment from fear to fear of missing out. In contrast, analysis firm CryptoQuant takes a different view, with founder Ki Young-Ju stating 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 exhausts. Funding rates on perpetual futures across major exchanges remain negative on a 7-day basis at -0.13%, 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 at the same time as the rally toward $79,000 was front-loaded by short covering. The key test is whether the next attempt at the level brings fresh spot bids or runs out of shorts to squeeze.
Corporate accumulation of bitcoin continues, with Strategy buying $3.9 billion of bitcoin in April, the firm's largest monthly accumulation in a year. Japanese company Metaplanet announced a $50 million bond issuance on Tuesday to finance new bitcoin purchases, the latest in a series of yen-denominated debt deals the firm has used to build one of the largest corporate bitcoin treasuries outside the U.S.
The week's catalysts are expected to arrive on Wednesday and Thursday, with the Federal Reserve announcing its policy decision on Wednesday, and traders pricing in a higher likelihood of a rate cut after the Justice Department closed its probe into Fed Chair Jerome Powell. Additionally, megacap tech earnings from major companies such as Alphabet, Microsoft, Amazon, and Meta on Wednesday, and Apple on Thursday, which represent roughly a quarter of the S&P 500's market capitalization, could also serve as a catalyst to push bitcoin past $80,000. Without one of these catalysts, the rejection from the $79,000 level starts to define the upper end of the range rather than precede a breakout.