The brief rally of bitcoin, which reached nearly $80,000, was short-lived, as the cryptocurrency's value dipped to $76,600 during the US trading session on Monday, influenced by escalating geopolitical risks. Following an overnight high near $80,000, its highest point since early February, bitcoin reversed direction, experiencing a 1.5% decline over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, also fell by approximately 3%, while the CoinDesk 20 Index, a digital assets market benchmark, decreased by 2% on Monday.
The decline is attributed to growing investor caution regarding US-Iran negotiations and the ongoing disruption of the Strait of Hormuz, a crucial 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, has introduced uncertainty. The outlook remains unclear after President Trump canceled plans to send envoys to Pakistan for negotiations with Iran.
Oil prices continued to rise, with Brent crude oil increasing by over 3% to $107 per barrel and West Texas Intermediate crude oil rising 2.6% to $97. The Nasdaq fell 0.3% in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week. Crypto-related stocks also declined, with Coinbase, Circle, and Galaxy Digital experiencing losses of 1.5%, 3.5%, and nearly 6%, respectively.
Underlying bitcoin's price action is a market struggling to gain momentum despite strong institutional demand. Bitfinex analysts noted that short-term bitcoin holders have been selling into strength, offsetting fresh demand from ETF buyers and Strategy.
The analysts predict that the path of least resistance in the near term is likely consolidation or a pullback toward the $75,000 region, and a decisive break above $80,000 is required to confirm a more durable bullish regime.