The brief surge of bitcoin towards the $80,000 threshold lost momentum on Monday, with the cryptocurrency's value dropping to $76,600 during the US trading session, as concerns over geopolitical instability resurfaced. Following an overnight high near $80,000, its highest point since early February, bitcoin reversed its trajectory, declining approximately 1.5% over 24 hours. Major alternative cryptocurrencies, including ether, XRP, and solana, also fell, each experiencing a decline of around 3%, while the CoinDesk 20 Index, a benchmark for the broader digital assets market, decreased by about 2% on Monday. The downturn is attributed to growing investor caution regarding the outlook for US-Iran negotiations and the ongoing disruption to the Strait of Hormuz, a crucial global oil transit route.
According to recent reports, Iran has proposed a ceasefire in the strait in exchange for a comprehensive end to the conflict, including the lifting of the US naval blockade and a delay in nuclear discussions. Despite this proposal aiming to revive stalled negotiations, uncertainty remains elevated after President Trump canceled the planned dispatch of envoys to Pakistan for negotiations with the Iranian side.
Oil prices continued their ascent, with Brent crude oil rising over 3% to $107 per barrel and West Texas Intermediate crude oil increasing 2.6% to $97. The Nasdaq experienced a 0.3% decline in morning trading, retreating from recent record highs, while the S&P 500 remained flat ahead of a significant earnings week featuring prominent firms such as Alphabet, Meta, Microsoft, and Apple. Meanwhile, stocks linked to the crypto sector declined across the board, 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. Analysts at Bitfinex observed that short-term bitcoin holders in profit have been selling into strength, offsetting fresh demand from ETF buyers and Strategy. They noted that the most likely near-term path is 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.