The brief push towards $80,000 by bitcoin (BTC) was short-lived, as the cryptocurrency's price slipped back to $76,600 during the US trading session on Monday, driven by escalating geopolitical tensions. Following an overnight trade near $80,000, its highest point since early February, bitcoin reversed direction, posting a 1.5% decline over 24 hours. Major alternative cryptocurrencies, including ether (ETH), XRP, and solana (SOL), each dropped around 3%, while the CoinDesk 20 Index, which tracks the broader digital assets market, fell by approximately 2% on Monday.
The downturn is attributed to growing investor caution regarding the prospects of US-Iran negotiations and the ongoing disruption in the Strait of Hormuz, a critical global oil transit route. A recent Wall Street Journal report revealed that Iran has proposed a cessation of attacks on ships in the strait in exchange for a complete end to the war, including the lifting of the US naval blockade and a delay in nuclear talks. Although the proposal aims to restart stalled negotiations, uncertainty remains high after President Trump canceled the planned visit of US envoys to Pakistan for negotiations with the Iranian side over the weekend. Oil prices continued their ascent, with Brent crude oil prices rising over 3% to $107 per barrel, and West Texas Intermediate crude oil increasing 2.6% to $97.
The Nasdaq experienced a 0.3% decline in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week that includes major firms such as Alphabet, Meta, Microsoft, and Apple. Meanwhile, stocks linked to the cryptocurrency sector declined across the board, with shares of crypto exchange Coinbase (COIN) falling 1.5%, Circle (CRCL), the issuer of the USDC stablecoin, dropping 3.5%, and Galaxy Digital (GLXY), a digital asset investment firm, sliding nearly 6%. Underlying market dynamics indicate that bitcoin's price action suggests a struggle to build momentum despite robust institutional demand.
Bitfinex analysts observed that short-term bitcoin holders who are in profit have been selling into strength, thereby offsetting fresh demand from ETF buyers and Strategy (MSTR). According to the analysts, 'the path of least resistance in the near term 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.'