The bitcoin rally towards $80,000 was short-lived on Monday, with prices dropping back to $76,600 during the US session as geopolitical tensions regained focus. After trading near $80,000 overnight, its highest level since early February, the largest cryptocurrency reversed direction and declined by about 1.5% over the past 24 hours. Major alternative cryptocurrencies followed suit, with ether, XRP, and solana each falling around 3%. The CoinDesk 20 Index, a benchmark for the broader digital assets market, fell approximately 2% on Monday.

The pullback occurs as investors become cautious about the outlook for US-Iran negotiations and the ongoing disruption to the Strait of Hormuz, a crucial global oil transit route. According to a Wall Street Journal report, Iran has proposed halting attacks on ships in the strait in exchange for a full end to the war, including lifting the US naval blockade and delaying nuclear talks.

The proposal aims to restart stalled negotiations, but uncertainty remains high after President Trump canceled sending envoys to Pakistan for negotiating with the Iranian side on Saturday. Oil prices continued to rise during the day, with Brent crude oil prices climbing more than 3% to $107 a barrel, and West Texas Intermediate crude oil up 2.6% to $97.

The Nasdaq edged 0.3% lower in morning trading, pulling back from recent record highs, while the S&P 500 was flat, ahead of a significant earnings week that includes major firms such as Alphabet, Meta, Microsoft, and Apple. Meanwhile, crypto-related stocks declined across the board, with shares of crypto exchange Coinbase falling 1.5%, Circle dropping 3.5%, and Galaxy Digital sliding nearly 6%.

Under the surface, bitcoin's price action suggests a market struggling to build momentum despite strong institutional demand. Bitfinex analysts noted that short-term BTC holders sitting in profit have been selling into strength, offsetting fresh demand from ETF buyers and strategic investors. 'The path of least resistance in the near term is likely consolidation or a pullback toward the $75,000 region,' the analysts said, adding that 'a decisive break above $80,000 is required to confirm a more durable bullish regime.'