The bitcoin price is experiencing a downturn on Tuesday, having failed to maintain its position above $79,000 for the third time in eight sessions, thereby establishing this level as a defining factor in the current range. On Tuesday morning, bitcoin was trading at $76,923, representing a 2.4% decline over the past 24 hours, after reaching $79,399 on Monday and subsequently reversing its gains throughout the day. Meanwhile, other major cryptocurrencies such as ether, XRP, solana, and BNB also saw significant declines, with ether falling 3.7% to $2,290, XRP slipping 3.2% to $1.39, solana dropping 3.9% to $84.10, and BNB declining 1.8% to $625. The top 10 tokens all traded in the red over the past 24 hours, with the exception of TRON and DOGE.
The surge in Brent crude oil prices, which rose 1% to above $109 a barrel and extended its rally to a seventh day, was prompted by the failure of Iran's interim deal proposal to reopen the Strait of Hormuz. The White House indicated that U.S. officials were discussing the latest Iranian proposal while maintaining their 'red lines' on any deal to end the eight-week war.
The MSCI Asia Pacific Index saw little change, with Japanese stocks supported by the Bank of Japan's decision to keep its policy unchanged, and the yen strengthened 0.3% to around 159 per dollar. Market analysts are presenting two differing views on the bitcoin market. Mike Novogratz of Galaxy Digital noted that U.S. retail investors have returned to the market, and the combination of retail demand, institutional capital, and limited supply creates a foundation for further upside.
According to Santiment data, whales have accumulated over 40,000 BTC in the past two weeks, and the firm has observed a sharp shift in sentiment from fear to fear of missing out. In contrast, analysis firm CryptoQuant takes a more pessimistic view, with founder Ki Young-Ju stating that bitcoin's push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained spot demand, and that large-scale short covering leaves the market vulnerable to a reversal once the squeeze exhausts. Funding rates on perpetual futures across major exchanges remain negative on a 7-day basis at -0.13%, indicating that shorts are still paying longs to hold positions, a pattern that historically precedes both squeezes and the unwinding of squeezes.
The two views are not mutually exclusive, as spot demand from retail and institutions can return at the same time as the rally toward $79,000 was front-loaded by short covering. The key test is whether the next attempt at the level brings fresh spot bids or runs out of shorts to squeeze. Corporate accumulation of bitcoin continues, with Strategy buying $3.9 billion of bitcoin in April, the firm's largest monthly accumulation in a year.
Japanese company Metaplanet announced a $50 million bond issuance on Tuesday to finance new bitcoin purchases, the latest in a series of yen-denominated debt deals the firm has used to build one of the largest corporate bitcoin treasuries outside the U.S. The week's catalysts are expected to arrive on Wednesday and Thursday, with the Federal Reserve announcing its policy decision on Wednesday, and megacap tech earnings from major companies such as Alphabet, Microsoft, Amazon, and Meta on Wednesday and Apple on Thursday, which could potentially push bitcoin past $80,000.