Bitcoin's price has dropped below $77,000 after failing to sustain its position above $79,000 for the third time in eight sessions. This level is now establishing the upper limit of its current range.
On Tuesday morning, the cryptocurrency was trading at $76,923, marking a 2.4% decline over the past 24 hours. This downturn followed a rejection from the $79,400 level the previous day. Other major cryptocurrencies also experienced significant losses, with Ether declining 3.7% to $2,290, XRP slipping 3.2% to $1.39, Solana dropping 3.9% to $84.10, and BNB falling 1.8% to $625. The only exceptions among the top 10 tokens were TRON and DOGE.
The surge in oil prices was driven by the failure of Iran's proposal to reopen the Strait of Hormuz, leading to a 1% increase in Brent crude to over $109 a barrel. The MSCI Asia Pacific Index remained relatively stable, with Japanese stocks receiving support from the Bank of Japan's decision to maintain its policy unchanged.
The yen strengthened by 0.3% to approximately 159 per dollar. Market analysts are presenting two distinct interpretations of Bitcoin's current trajectory. Mike Novogratz of Galaxy Digital believes that the return of U.S.
retail investors, combined with institutional capital and limited supply, is laying the groundwork for further upside. 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, analysis firm CryptoQuant argues that Bitcoin's push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained spot demand. According to Ki Young-Ju, the firm's founder, this leaves the market vulnerable to a reversal once the squeeze is exhausted.
Funding rates on perpetual futures across major exchanges remain negative, indicating that shorts are still paying longs to hold positions. This pattern has historically preceded both short squeezes and their subsequent unwinding. The two views are not mutually exclusive, as spot demand from retail and institutions can coexist with the rally being front-loaded by short covering.
The key test will be whether the next attempt to reach the $79,000 level brings fresh spot bids or exhausts the available shorts to squeeze. Meanwhile, corporate accumulation of Bitcoin continues unabated. Strategy bought $3.9 billion worth of Bitcoin in April, its largest monthly accumulation in a year. Japanese company Metaplanet announced a $50 million bond issuance to finance new Bitcoin purchases, adding to its existing corporate treasury.
The upcoming week holds significant catalysts, including the Federal Reserve's policy decision on Wednesday and the release of earnings reports from major tech companies such as Alphabet, Microsoft, Amazon, Meta, and Apple. Either the Fed's decision or a strong earnings beat could potentially push Bitcoin above $80,000. Without such a catalyst, the rejection from the $79,000 level may define the upper end of the range rather than precede a breakout.