The brief surge in bitcoin's price towards $80,000 lost momentum on Monday, with the cryptocurrency's value dropping to $76,600 during the US trading session as concerns over Iran and rising oil prices took center stage. Bitcoin had reached its highest level since early February, trading near $80,000 overnight, but subsequently reversed course, posting a 1.5% decline over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, followed suit, each falling around 3%, while the CoinDesk 20 Index, which tracks the broader digital assets market, fell 2% on Monday. The pullback is attributed to growing investor caution regarding 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 a delay in nuclear talks, aims to restart stalled negotiations, but uncertainty remains high. Oil prices continued to rise, with Brent crude oil prices increasing by over 3% to $107 a 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. Meanwhile, stocks linked to the crypto sector declined across the board, with Coinbase, Circle, and Galaxy Digital posting losses. 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 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.