The price of bitcoin has fallen on Tuesday after it failed to maintain its position above $79,000 for the third time in eight sessions, thus defining the current range. On Tuesday morning, the cryptocurrency was trading at $76,923, down 2.4% over 24 hours after reaching $79,399 on Monday and then reversing its gains throughout the day. Other major cryptocurrencies, including ether, XRP, solana, and BNB, have also seen 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 only exceptions among the top 10 tokens were TRON and DOGE.
The surge in oil prices, with Brent crude rising 1% to over $109 a barrel, has extended its rally to a seventh consecutive day, following the failure of Iran's interim proposal to reopen the Strait of Hormuz. The White House has stated that U.S.
officials are reviewing 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 stable, with Japanese stocks receiving support from the Bank of Japan's decision to keep its policy unchanged, resulting in a 0.3% strengthening of the yen to around 159 per dollar. Market analysts have presented two different interpretations of the bitcoin market trends.
According to Mike Novogratz of Galaxy Digital, the return of U.S. retail investors to the market, combined with institutional capital and limited supply, creates a solid foundation for further growth. Data from Santiment indicates that whales have accumulated over 40,000 BTC in the past two weeks and notes a significant shift in sentiment from fear to fear of missing out. On the other hand, CryptoQuant's founder Ki Young-Ju believes that the push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained spot demand, leaving the market vulnerable to reversal once the squeeze exhausts.
Funding rates on perpetual futures across major exchanges remain negative, with shorts 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 coexist with the rally toward $79,000 being front-loaded by short covering. The key test will be 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 buying $3.9 billion of bitcoin in April, the largest monthly accumulation in a year. Japanese company Metaplanet has 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 U.S.
The upcoming Federal Reserve policy decision on Wednesday and megacap tech earnings from major companies may serve as catalysts to push bitcoin past $80,000. Without such catalysts, the rejection from this level may define the upper end of the range rather than precede a breakout.