The price of bitcoin has fallen on Tuesday following its inability to sustain a level above $79,000, with this level now marking the upper limit of its current range. On Tuesday morning, bitcoin was trading at $76,923, representing a 2.4% decline over the past 24 hours, after it had climbed to $79,399 the previous day and subsequently reversed. Other major cryptocurrencies, including ether, XRP, solana, and BNB, have also experienced 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 only exceptions among the top 10 tokens were TRON and DOGE. The surge in oil prices, with Brent crude rising 1% to above $109 a barrel, has been driven by the failure of Iran's interim deal proposal to reopen the Strait of Hormuz.
The White House has indicated that US officials are discussing the proposal while maintaining their 'red lines' on any deal to end the eight-week conflict. The MSCI Asia Pacific Index has seen minimal change, with Japanese stocks supported by the Bank of Japan's decision to keep its policy unchanged. The yen has strengthened 0.3% to around 159 per dollar. Market analysts are presenting two contrasting views on the bitcoin market.
Mike Novogratz of Galaxy Digital believes that the return of US retail investors, combined with institutional capital and limited supply, creates a foundation for further price increases. Santiment data shows that whales have accumulated over 40,000 BTC in the past two weeks, with a significant shift in sentiment from fear to fear of missing out. In contrast, analysis firm CryptoQuant argues that the push above $79,000 was driven primarily by a short squeeze in the derivatives market rather than sustained spot demand, leaving the market vulnerable to a reversal once the squeeze exhausts. Funding rates on perpetual futures across major exchanges remain negative, indicating that shorts are still paying longs to hold positions.
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. 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 has announced a $50 million bond issuance to finance new bitcoin purchases, the latest in a series of yen-denominated debt deals used to build one of the largest corporate bitcoin treasuries outside the US. The week's key catalysts are set to arrive on Wednesday and Thursday, with the Federal Reserve announcing its policy decision and megacap tech earnings from major companies, which could potentially push bitcoin past $80,000.