The price of Bitcoin has fallen on Tuesday after failing to maintain its position above $79,000 for the third time in eight sessions, thus establishing a new range. As of Tuesday morning, Bitcoin was trading at $76,923, down 2.4% over the past 24 hours, following a climb to $79,399 on Monday. Other major cryptocurrencies, including ether, XRP, solana, and BNB, also saw significant declines, with ether falling 3.7% to $2,290, XRP slipping 3.2% to $1.39, solana dropping 3.9% to $84.10, and BNB declining 1.8% to $625. The only exceptions among the top 10 tokens were TRON and DOGE.
Meanwhile, Brent crude oil prices rose 1% to over $109 per barrel, marking the seventh consecutive day of gains, after Iran's proposal for an interim deal to reopen the Strait of Hormuz failed to make progress over the weekend. The White House stated that US officials were discussing Iran's latest proposal while maintaining their 'red lines' for any deal to end the eight-week conflict. The MSCI Asia Pacific Index remained relatively stable, with Japanese stocks receiving support from the Bank of Japan's decision to keep its policy unchanged. The yen strengthened 0.3% to approximately 159 per dollar.
Market analysts have presented two different interpretations of the Bitcoin trend. Mike Novogratz, founder of Galaxy Digital, noted that US retail investors have returned to the market, and the combination of retail demand, institutional capital, and limited supply creates a solid foundation for further growth. According to Santiment data, whales have accumulated over 40,000 BTC in the past two weeks, and the firm has observed a significant shift in sentiment from fear to fear of missing out. In contrast, CryptoQuant's founder, Ki Young-Ju, argued that Bitcoin's surge above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained spot demand.
He warned that large-scale short covering leaves the market vulnerable to a reversal once the squeeze is exhausted. Funding rates on perpetual futures across major exchanges remain negative on a 7-day basis, indicating that shorts are still paying longs to hold positions. This pattern has historically preceded both short squeezes and their unwinding.
The two views are not mutually exclusive, as spot demand from retail and institutions can return simultaneously with the rally toward $79,000 being front-loaded by short covering. The key test is whether the next attempt to reach this level will bring fresh spot bids or if it will run out of shorts to squeeze.
Corporate accumulation of Bitcoin continues, with Strategy purchasing $3.9 billion worth of Bitcoin in April, the largest monthly accumulation in a year. Japanese company Metaplanet announced a $50 million bond issuance on Tuesday to finance new Bitcoin purchases, the latest in a series of yen-denominated debt deals used to build one of the largest corporate Bitcoin treasuries outside the US. This week's major catalysts are expected on Wednesday and Thursday, with the Federal Reserve announcing its policy decision on Wednesday and megacap tech earnings from major companies like Alphabet, Microsoft, Amazon, Meta, and Apple.
Either the Fed's decision or a strong earnings beat could be the catalyst to push Bitcoin past $80,000. Without such a catalyst, the rejection from this level may define the upper end of the range rather than precede a breakout.