The price of Bitcoin has dropped on Tuesday after failing to maintain its position above $79,000 for the third time in eight sessions, thus establishing a new range. On Tuesday morning, the cryptocurrency was trading at $76,923, marking a 2.4% decline over the past 24 hours after reaching $79,399 on Monday and subsequently reversing its gains.
Other major cryptocurrencies, including Ether, XRP, Solana, and BNB, also saw significant losses, with declines ranging from 1.8% to 3.9%. In contrast, TRON and DOGE were the only top 10 tokens to trade in the green over the past 24 hours.
The surge in Brent crude oil prices, which rose 1% to over $109 per barrel, has been attributed to the failure of Iran's proposal to reopen the Strait of Hormuz. The MSCI Asia Pacific Index remained relatively stable, with Japanese stocks receiving support from the Bank of Japan's decision to maintain its policy unchanged.
The yen strengthened 0.3% against the dollar, reaching approximately 159 per dollar. Market analysts are presenting two distinct interpretations of the bitcoin market.
According to Mike Novogratz of Galaxy Digital, the return of U.S. retail investors, combined with institutional capital and limited supply, lays the groundwork for potential further growth. Data from Santiment indicates that whales have accumulated over 40,000 BTC in the past two weeks, with a notable shift in sentiment from fear to fear of missing out.
In contrast, CryptoQuant's founder Ki Young-Ju argues that the recent 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 a reversal once the squeeze is exhausted. Funding rates on perpetual futures across major exchanges remain negative, indicating that shorts are still paying longs to hold positions. The two views are not mutually exclusive, as spot demand from retail and institutions can coexist with the rally being driven by short covering.
Corporate accumulation of bitcoin continues, with Strategy purchasing $3.9 billion worth of bitcoin in April, its largest monthly accumulation in a year. Japanese company Metaplanet has announced a $50 million bond issuance to finance new bitcoin purchases, further expanding its corporate bitcoin treasury.
The upcoming week is expected to bring significant catalysts, including the Federal Reserve's policy decision on Wednesday and major tech earnings from companies like Alphabet, Microsoft, and Apple. Either the Fed's decision or a strong earnings beat could potentially push bitcoin's price above $80,000, while the absence of such catalysts may lead to the rejection from this level defining the upper end of the range rather than preceding a breakout.