The brief surge of bitcoin towards $80,000 lost steam on Monday, with the cryptocurrency's price slipping to $76,600 during the US trading session, as geopolitical tensions regained prominence. Following an overnight high 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, XRP, and solana, each dropped around 3%, while the CoinDesk 20 Index, a digital assets market benchmark, fell 2% on Monday.
The pullback is attributed to investor caution regarding US-Iran negotiations and the ongoing disruption in the Strait of Hormuz, a crucial global oil transit route. According to reports, 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. However, uncertainty remains elevated after President Trump canceled the dispatch of envoys to Pakistan for negotiations with Iran. Oil prices continued their ascent, with Brent crude rising over 3% to $107 per 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. Meanwhile, stocks linked to cryptocurrencies 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 robust 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 near-term path of least resistance 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.