The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the cryptocurrency's value dropping back to $76,600 during the US trading session, as concerns over geopolitical tensions resurfaced. Following an overnight high near $80,000, its highest point since early February, bitcoin reversed direction, posting a 1.5% decline over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, each experienced a decline of around 3%, while the CoinDesk 20 Index, a benchmark for the broader digital asset market, fell by approximately 2% on Monday.
This pullback occurs as investors become increasingly cautious about the prospects of US-Iran negotiations and the ongoing disruptions 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 complete end to the war, including the lifting of the US naval blockade and delaying nuclear talks, aims to revive stalled negotiations.
However, uncertainty remains high after President Trump canceled the planned envoy to Pakistan for negotiating with the Iranian side. Oil prices continued their ascent, with Brent crude oil climbing over 3% to $107 per 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 cryptocurrency sector declined, with Coinbase, Circle, and Galaxy Digital experiencing losses.
Beneath the surface, bitcoin's price action suggests a market struggling to gain momentum despite robust institutional demand. Bitfinex analysts observed that short-term bitcoin holders who are in profit have been selling, offsetting new demand from ETF buyers and other strategic investors.
According to the analysts, the most likely near-term path is consolidation or a pullback towards the $75,000 region, with a decisive break above $80,000 required to confirm a more durable bullish trend.