The bitcoin price is currently experiencing a downturn on Tuesday, failing to maintain its position above $79,000 for the third time in eight sessions, thus establishing this level as a defining factor in its price range. On Tuesday morning, bitcoin was trading at $76,923, representing a 2.4% decline over the past 24 hours, after reaching $79,399 on Monday and subsequently reversing its gains throughout the day. Other major cryptocurrencies, including ether, XRP, solana, and BNB, have also suffered significant losses, with declines of 3.7%, 3.2%, 3.9%, and 1.8%, respectively. The only exceptions among the top 10 tokens were TRON and DOGE.
The surge in Brent crude oil prices, which have risen by 1% to over $109 per barrel, extending their rally to a seventh day, has been attributed to the failure of Iran's interim proposal to reopen the Strait of Hormuz. The White House has stated that U.S. officials are discussing the latest Iranian proposal while maintaining their 'red lines' on any potential deal to end the eight-week conflict. The MSCI Asia Pacific Index has remained relatively stable, with Japanese stocks receiving support from the Bank of Japan's decision to maintain its current policy.
The yen has strengthened by 0.3% to approximately 159 per dollar. Market analysts are presenting two distinct interpretations of the bitcoin market. According to Mike Novogratz of Galaxy Digital, the return of U.S. retail investors to the market, combined with institutional capital and limited supply, is creating a solid foundation for further price increases.
Data from Santiment indicates that whales have accumulated over 40,000 BTC in the past two weeks, and the firm has noted a significant shift in sentiment from fear to fear of missing out. In contrast, CryptoQuant's founder, Ki Young-Ju, has expressed a different view, stating that the recent push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained spot demand, and that the large-scale short covering has left the market vulnerable to a reversal once the squeeze exhausts.
The 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, a pattern that historically precedes both squeezes and the unwinding of squeezes. These two perspectives 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 will be whether the next attempt at this level brings fresh spot bids or runs out of shorts to squeeze. Corporate accumulation of bitcoin continues to grow, with Strategy purchasing $3.9 billion of bitcoin in April, the firm's largest monthly accumulation in a year. Additionally, Japanese company Metaplanet has announced a $50 million bond issuance to finance new bitcoin purchases, further expanding its corporate bitcoin treasury. This week's catalysts are expected to arrive on Wednesday and Thursday, with the Federal Reserve announcing its policy decision and megacap tech earnings from major companies, which could potentially push bitcoin past $80,000.