The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the price dropping to $76,600 during the US trading session. This shift occurred as geopolitical tensions, particularly those involving Iran, began to influence the market.
After reaching its highest point since early February near $80,000, the largest cryptocurrency experienced a reversal, resulting in a 1.5% decline over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, followed suit with losses of around 3%. The CoinDesk 20 Index, which serves as a benchmark for the broader digital assets market, decreased by approximately 2% on Monday. The pullback is attributed to growing investor caution regarding the outlook for 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 complete end to the war, including the lifting of the US naval blockade and a delay in nuclear talks, aims to restart stalled negotiations. However, uncertainty remains high following President Trump's cancellation of envoy meetings with the Iranian side. Oil prices continued their ascent, with Brent crude oil rising over 3% to $107 per barrel and West Texas Intermediate crude oil increasing by 2.6% to $97. The Nasdaq experienced a 0.3% decline in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week featuring companies like Alphabet, Meta, Microsoft, and Apple.
Meanwhile, stocks linked to the crypto sector declined across the board, with Coinbase shares falling 1.5%, Circle dropping 3.5%, and Galaxy Digital sliding nearly 6%. Beneath the surface, bitcoin's price action suggests a market struggling to gain momentum despite strong institutional demand. Bitfinex analysts observed that short-term bitcoin holders who are in profit have been selling into strength, offsetting fresh demand from ETF buyers and other investors.
According to the analysts, the most likely near-term path is consolidation or a pullback towards the $75,000 region, and a decisive break above $80,000 is necessary to confirm a more durable bullish trend.