The brief surge of bitcoin towards $80,000 lost momentum on Monday, with the cryptocurrency's value dropping to $76,600 during the US trading session, as concerns over geopolitical tensions resurfaced. After reaching its highest point since early February, near $80,000, bitcoin reversed direction, experiencing a 1.5% decline over the past 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, also fell, each declining around 3%, while the CoinDesk 20 Index, a benchmark for digital assets, decreased by 2% on Monday.
The decline is attributed to growing investor caution regarding the outlook for US-Iran negotiations and the ongoing disruption to the Strait of Hormuz, a critical 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 remains high after President Trump canceled plans to send envoys to Pakistan for negotiations with Iran. Oil prices continued to rise, with Brent crude oil increasing by over 3% to $107 per barrel and West Texas Intermediate crude oil rising 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 declined across the board, 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 build momentum despite strong institutional demand. Bitfinex analysts noted that short-term bitcoin holders are selling into strength, offsetting fresh 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 required to confirm a more durable bullish trend.