The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the cryptocurrency's price slipping back to $76,600 during the US trading session as geopolitical concerns regained prominence. Following an overnight trade near $80,000, its highest level since early February, bitcoin reversed direction and dropped about 1.5% over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, also declined, each falling around 3%, while the CoinDesk 20 Index, a benchmark for the broader digital assets market, decreased by approximately 2% on Monday.
The pullback is attributed to growing investor caution regarding the outlook for US-Iran negotiations and the ongoing disruption to 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 full 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 to rise, with Brent crude oil prices increasing by over 3% to $107 per barrel and West Texas Intermediate crude oil rising 2.6% to $97. The Nasdaq declined 0.3% in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week.
Meanwhile, stocks linked to cryptocurrency declined, with Coinbase, Circle, and Galaxy Digital experiencing drops of 1.5%, 3.5%, and nearly 6%, respectively. Underlying bitcoin's price action is a market struggling to build momentum despite strong institutional demand. Bitfinex analysts observed that short-term bitcoin holders in profit have been selling, offsetting fresh demand from ETF buyers and investment strategies.
The analysts noted that the near-term path of least resistance is likely consolidation or a pullback towards the $75,000 region, adding that a decisive break above $80,000 is required to confirm a more durable bullish regime.