The bitcoin price has been on a downward trend, failing to sustain levels above $79,000. As of Tuesday, the cryptocurrency was trading at $76,923, marking a 2.4% decline over the past day.
This downward movement follows a rejection of the $79,400 level the previous day. Other prominent cryptocurrencies, including ether, solana, and BNB, have also seen their values drop, with ether falling 3.7% to $2,290, solana decreasing by 3.9% to $84.10, and BNB slipping 1.8%. The only exceptions among the top 10 tokens were TRON and DOGE, which managed to avoid the red.
The surge in oil prices, with Brent crude rising 1% to over $109 a barrel, has been attributed to the failure of Iran's proposal to reopen the Strait of Hormuz, leading to an extension of the rally to a seventh consecutive day. The global market is also watching the developments in the US, where officials are discussing the latest Iranian proposal while maintaining their stance on any potential deal to end the ongoing conflict. The MSCI Asia Pacific Index remained relatively stable, supported by the Bank of Japan's decision to maintain its policy unchanged, which in turn strengthened the yen by 0.3% to approximately 159 per dollar. Market analysts are offering divergent views on the bitcoin trend.
Mike Novogratz from Galaxy Digital suggests that the return of US retail investors, combined with institutional capital and limited supply, could drive further upside. This perspective is supported by data from Santiment, which indicates that whales have accumulated over 40,000 BTC in the last two weeks and notes a significant shift in sentiment from fear to fear of missing out. On the other hand, CryptoQuant's Ki Young-Ju argues that the recent push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained demand, making the market vulnerable to a reversal once the squeeze is exhausted.
The funding rates on perpetual futures across major exchanges remain negative, suggesting that shorts are still paying longs to hold positions, a pattern that precedes both squeezes and their unwinding. These views are not mutually exclusive, as spot demand from retail and institutions can coincide with short covering driving the rally. The test of the market's strength lies in whether the next attempt to reach the $79,000 level will be met with fresh spot bids or if it will run out of shorts to squeeze. Meanwhile, 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 has also announced a $50 million bond issuance to finance new bitcoin purchases, adding to its already significant corporate bitcoin treasury. The upcoming week holds significant catalysts, including the Federal Reserve's policy decision on Wednesday, which may see a rate cut following the closure of the Justice Department's probe into Fed Chair Jerome Powell.
Additionally, megacap tech earnings from major companies such as Alphabet, Microsoft, Amazon, Meta, and Apple are scheduled for Wednesday and Thursday, representing a substantial portion of the S&P 500's market capitalization. Either the Fed's decision or a strong earnings beat could potentially push bitcoin past the $80,000 mark. Without such a catalyst, the rejection from the $79,000 level may define the upper limit of the current range rather than preceding a breakout.