The price of bitcoin has fallen on Tuesday after failing to sustain levels above $79,000 for the third time in eight sessions, thereby establishing this level as a defining factor in the current range. On Tuesday morning, bitcoin was trading at $76,923, representing a 2.4% decline over the past 24 hours, following a rejection from $79,399 on Monday. Other major cryptocurrencies, including ether, XRP, solana, and BNB, 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 top 10 tokens all traded in the red over the past 24 hours, with the exception of TRON and DOGE.
Meanwhile, Brent crude oil rose 1% to above $109 per barrel, marking its seventh consecutive day of gains, following the failure of Iran's proposal to reopen the Strait of Hormuz. The White House has indicated that U.S. officials are discussing the latest proposal from Iran but are maintaining their 'red lines' on any potential deal to end the eight-week conflict. The MSCI Asia Pacific Index remained relatively stable, with Japanese stocks receiving support from the Bank of Japan's decision to maintain its current policy.
The yen strengthened 0.3% to approximately 159 per dollar. Market analysts are presenting two distinct interpretations of the bitcoin market.
Mike Novogratz of Galaxy Digital has stated that the return of U.S. retail investors to the market, combined with institutional capital and limited supply, creates a foundation for further upside potential. Data from Santiment shows that whales have accumulated over 40,000 BTC in the past two weeks, and the firm has noted a significant shift in sentiment from fear to fear of missing out.
In contrast, analysis firm CryptoQuant has taken the opposing view, with founder Ki Young-Ju suggesting that bitcoin's push above $79,000 was primarily driven by a short squeeze in the derivatives market rather than sustained spot demand. According to CryptoQuant, the large-scale short covering has left the market vulnerable to a reversal once the squeeze is exhausted. Funding rates on perpetual futures across major exchanges remain negative on a 7-day basis, indicating that shorts are still paying longs to hold positions, a pattern that historically precedes both short squeezes and their unwinding. These two views are not mutually exclusive, as spot demand from retail and institutions can return simultaneously with the rally toward $79,000 being front-loaded by short covering.
The key test will be whether the next attempt at this level brings fresh spot bids or runs out of shorts to squeeze. Corporate accumulation of bitcoin continues, with Strategy purchasing $3.9 billion worth 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 U.S. The upcoming week's catalysts include the Federal Reserve's policy decision on Wednesday, with traders pricing in a higher likelihood of a rate cut after the Justice Department closed its probe into Fed Chair Jerome Powell.
Additionally, megacap tech earnings from major companies, including Alphabet, Microsoft, Amazon, Meta, and Apple, will be announced on Wednesday and Thursday, representing roughly a quarter of the S&P 500's market capitalization. Either the Fed's decision or a strong earnings beat could serve as the catalyst to push bitcoin above $80,000. Without such a catalyst, the rejection from this level may define the upper end of the range rather than preceding a breakout.