The brief surge of bitcoin towards $80,000 lost steam on Monday, with the cryptocurrency's price slipping to $76,600 during the US trading session, as geopolitical concerns 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, followed suit, each dropping around 3%, while the CoinDesk 20 Index, a benchmark for the broader digital assets market, fell 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 delayed nuclear talks, aims to restart stalled negotiations. However, uncertainty remains high after President Trump canceled the planned envoy to Pakistan for negotiations with Iran.
Oil prices continued their ascent, with Brent crude oil rising over 3% to $107 a barrel and West Texas Intermediate crude oil increasing 2.6% to $97. The Nasdaq dipped 0.3% in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week featuring major firms like Alphabet, Meta, Microsoft, and Apple.
Meanwhile, stocks linked to the crypto sector declined, with Coinbase shares falling 1.5%, Circle dropping 3.5%, and Galaxy Digital sliding nearly 6%. Underlying bitcoin's price action is a market struggling to gain momentum despite robust institutional demand. Bitfinex analysts observed that short-term bitcoin holders are selling their profits, offsetting new demand from ETF buyers and other investors. According to the analysts, the most likely near-term scenario is consolidation or a pullback towards the $75,000 region, with a decisive break above $80,000 required to confirm a more sustainable bullish trend.