On Tuesday, Bitcoin’s price fell, dropping below $77,000 after failing to maintain levels above $79,000 for three instances across eight trading sessions. The cryptocurrency was valued at $76,923 in the morning, marking a 2.4% decline over 24 hours following its peak at $79,399 on Monday. Ether decreased by 3.7% to $2,290, XRP fell 3.2% to $1.39, Solana dropped 3.9% to $84.10, and BNB declined 1.8% to $625. Among the top 10 tokens, only TRON (TRX) and Dogecoin saw gains.
Brent crude oil prices rose by 1%, reaching over $109 a barrel as tensions surrounding Iran’s proposal to reopen the Strait of Hormuz continue. The U.S. officials are deliberating on Iran’s latest proposal, but maintain certain “red lines” regarding any settlement for the ongoing eight-week conflict.
The MSCI Asia Pacific Index remained stable, bolstered by Japanese stocks due to the Bank of Japan’s decision to keep its policy unchanged in a 6-3 vote. The yen strengthened by 0.3% against the dollar.
Analysts are divided on Bitcoin’s market dynamics. Mike Novogratz from Galaxy Digital suggests that U.S. retail investors have re-entered the market, and combined with institutional capital and limited supply, this could support further price increases. Santiment data indicates whales accumulating over 40,000 BTC in two weeks, shifting sentiment towards ‘fear of missing out’.
Conversely, CryptoQuant’s founder Ki Young-Ju argues that Bitcoin’s recent spike above $79,000 was primarily due to a short squeeze in the derivatives market rather than consistent spot demand. He warns that large-scale short covering could lead to a price reversal once the squeeze is over.
Perpetual futures funding rates across major exchanges are negative at -0.13% for seven days, indicating shorts continue paying longs to hold positions—a historical precursor to both squeezes and their subsequent unwinding.
Despite differing views, both spot demand from retail investors and institutions can coexist with a rally driven by short covering. The challenge is whether future attempts at $79,000 will bring new spot bids or exhaust available shorts for squeezing.
Corporate Bitcoin accumulation persists, with Strategy buying $3.9 billion of the cryptocurrency in April—its largest monthly acquisition in a year. Meanwhile, Metaplanet announced a $50 million bond issuance to fund additional Bitcoin purchases, contributing to one of Japan’s largest corporate Bitcoin reserves outside the U.S.
Key events are expected on Wednesday and Thursday. The Federal Reserve will announce its policy decision on Wednesday, with increased speculation for a rate cut following the closure of the Justice Department’s probe into Fed Chair Jerome Powell. Tech earnings from Alphabet, Microsoft, Amazon, Meta, and Apple, representing about a quarter of the S&P 500’s market capitalization, are scheduled for release.
Either a Federal Reserve decision or significant earnings could push Bitcoin above $80,000. Without such catalysts, resistance at current levels may solidify without leading to a breakout.