The brief surge of bitcoin towards $80,000 lost steam on Monday, with the cryptocurrency's price dropping back to $76,600 during the US trading session, as geopolitical concerns regained prominence. After nearing $80,000 overnight, its highest point since early February, bitcoin reversed direction, declining about 1.5% over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, followed suit, each falling around 3%, while the CoinDesk 20 Index, a digital assets benchmark, decreased by 2% on Monday. This pullback occurs as investors become cautious about the outlook for US-Iran negotiations and the ongoing disruption in the Strait of Hormuz, a crucial global oil transit route.
A 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 talks with Iran.
Oil prices continued their ascent, with Brent crude rising 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. Cryptocurrency-linked 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 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 necessary to confirm a more durable bullish trend.