The price of bitcoin has fallen on Tuesday after it failed to sustain levels above $79,000 for the third time in eight sessions, establishing this level as a defining point in its current range. As of Tuesday morning, bitcoin was trading at $76,923, representing a 2.4% decrease over the past 24 hours, following a climb to $79,399 on Monday. Other major cryptocurrencies also experienced declines, with ether dropping 3.7% to $2,290, XRP slipping 3.2% to $1.39, solana falling 3.9% to $84.10, and BNB declining 1.8% to $625. The only exceptions among the top 10 tokens were TRON and DOGE.
Meanwhile, Brent crude oil prices rose 1% to over $109 per barrel, marking the seventh consecutive day of gains, as a proposed interim deal by Iran to reopen the Strait of Hormuz stalled over the weekend. The White House indicated that U.S. officials were reviewing the latest Iranian proposal but remained firm on their 'red lines' for any potential agreement to end the eight-week conflict.
In other market news, the MSCI Asia Pacific Index remained relatively stable, with Japanese stocks supported by the Bank of Japan's decision to maintain its current policy. The yen strengthened by 0.3% to approximately 159 per dollar. Market analysts are offering divergent views on bitcoin's prospects.
Mike Novogratz of Galaxy Digital noted that the return of U.S. retail investors, combined with institutional capital and limited supply, could drive further price increases. Data from Santiment showed that whales have accumulated over 40,000 BTC in the past two weeks, and the firm observed a significant shift in sentiment from fear to fear of missing out.
In contrast, CryptoQuant's Ki Young-Ju suggested that bitcoin's 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. Funding rates on perpetual futures across major exchanges remain negative, indicating that shorts are still paying longs to hold positions, a pattern that often precedes both short squeezes and their unwinding. These views are not mutually exclusive, as spot demand from retail and institutions can coexist with a rally driven by short covering. The key test will be whether the next attempt to reach the $79,000 level will attract fresh spot bids or if it will be limited by the availability of shorts to squeeze.
Despite these uncertainties, corporate accumulation of bitcoin continues unabated. Strategy purchased $3.9 billion worth of bitcoin in April, its largest monthly accumulation in a year, according to Bloomberg. Japanese company Metaplanet announced a $50 million bond issuance to finance new bitcoin purchases, further expanding its corporate treasury. This week's critical events include the Federal Reserve's policy decision on Wednesday, with traders anticipating a potential rate cut after the Justice Department closed its probe into Fed Chair Jerome Powell.
The earnings reports from major tech companies, including Alphabet, Microsoft, Amazon, Meta, and Apple, could also significantly impact the market. Either the Fed's decision or a strong earnings beat could propel bitcoin past $80,000; otherwise, the rejection from this level may define the upper limit of its current range rather than signal a breakout.