The brief surge of bitcoin towards $80,000 lost steam on Monday, with prices declining to $76,600 during the US trading session, as geopolitical tensions regained prominence. Following an overnight trade near $80,000, its highest since early February, the largest cryptocurrency reversed its trajectory, posting a 1.5% decline over 24 hours. Major altcoins, including ether, XRP, and solana, also fell, each losing around 3%, while the CoinDesk 20 Index dropped 2% on Monday.
The downturn is attributed to growing investor caution regarding US-Iran negotiations and the ongoing disruption in 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 comprehensive end to the war, including the lifting of the US naval blockade and a delay in nuclear talks, aims to revive stalled negotiations.
However, uncertainty persists after President Trump canceled the planned envoy to Pakistan for negotiations with Iran. Oil prices continued their ascent, with Brent crude climbing over 3% to $107 a barrel and West Texas Intermediate rising 2.6% to $97. The Nasdaq edged 0.3% lower, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week. Crypto-linked stocks also declined, with Coinbase, Circle, and Galaxy Digital experiencing losses.
Beneath the surface, bitcoin's price action suggests a struggle to build momentum despite robust institutional demand. Bitfinex analysts observed that short-term bitcoin holders are selling into strength, offsetting fresh demand from ETF buyers and strategic investors. The analysts predict that the path of least resistance in the near term is likely consolidation or a pullback towards the $75,000 region, emphasizing the need for a decisive break above $80,000 to confirm a more durable bullish trend.