The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the cryptocurrency's price dropping to $76,600 during the US trading session, as geopolitical concerns resurfaced. Following an overnight high near $80,000, its highest level since early February, bitcoin reversed direction, posting a 1.5% decline over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, also fell, each declining around 3%, while the CoinDesk 20 Index, a digital assets benchmark, dropped approximately 2% on Monday.
The downturn is attributed to growing investor caution regarding 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 complete end to the war, including the lifting of the US naval blockade and delayed nuclear talks, aims to restart stalled negotiations. However, uncertainty persists after President Trump canceled plans to send envoys to Pakistan for negotiations with Iran.
Oil prices continued to rise, with Brent crude climbing over 3% to $107 a barrel and West Texas Intermediate crude up 2.6% to $97. The Nasdaq edged 0.3% lower in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week. Crypto-related stocks also declined, with Coinbase shares falling 1.5%, Circle dropping 3.5%, and Galaxy Digital sliding nearly 6%.
Underlying bitcoin's price action is a market struggling to gain momentum despite strong institutional demand. Bitfinex analysts observed that short-term bitcoin holders are selling into strength, offsetting new demand from ETF buyers. The analysts predict that the near-term path of least resistance is likely consolidation or a pullback towards the $75,000 region, and a decisive break above $80,000 is necessary to confirm a more durable bullish trend.