Bitcoin has been rejected at $79,000 three times in eight sessions. The level now defines the area.
Bitcoin is trading at $76,923 on Tuesday morning, down 2.4% in 24 hours after rising to $79,399 on Monday and rebounding during the day. Ether fell 3.7% to $2,290, XRP fell 3.2% to $1.39, Solana fell 3.9% to $84.10, and BNB fell 1.8% to $625. The entire top 10 closed in the red in 24 hours outside of Tron and Dogecoin.
Brent crude rose 1% to over $109 a barrel. barrel, extending its rally into a seventh day after Iran’s tentative deal proposal to reopen the Strait of Hormuz failed to materialize over the weekend. The White House said US officials discussed the latest Iranian proposal but maintained “red lines” on any deal to end the eight-week war.
The MSCI Asia Pacific Index was little changed, with Japanese shares supported by the Bank of Japan’s 6-3 split decision to keep policy unchanged. The yen strengthened 0.3% to around 159 per dollar.
Two readings of the bitcoin band are circulating among market analysts.
Mike Novogratz of Galaxy Digital said in a note that US retail investors have returned to the market and the combination of retail demand, institutional capital and limited supply is creating the basis for further upside. Sentiment data shows whales have accumulated more than 40,000 BTC over the past two weeks, and the firm marked a sharp shift in sentiment from apprehension to fear of missing out over a short period of time.
The analysis company CryptoQuant has the opposite view. Founder Ki Young-Ju said in an X post that bitcoin’s push above $79,000 was primarily driven by short-term pressure in the derivatives market rather than sustained spot demand, and that large-scale short-covering leaves the market vulnerable to a reversal once the pressure is exhausted.
Funding rates on perpetual futures across major exchanges remain negative on a 7-day basis at -0.13% per Coinglass, meaning shorts still pay long to hold positions, the pattern that historically precedes both squeezes and the unwinding of squeezes.
The two views are not mutually exclusive. Spot demand from retail and institutions may return while the rise towards $79,000 was front-loaded by short covering. The test is whether the next attempt at the level brings new spot bids or runs out of shorts to push.
The corporate accumulation continues regardless. Strategy bought $3.9 billion in bitcoin in April per Bloomberg, the firm’s largest monthly accumulation in a year.
Japanese company Metaplanet announced a $50 million bond issue on Tuesday to fund new bitcoin purchases, the latest in a series of yen-denominated debt deals the firm has used to build one of the largest corporate bitcoin sovereign bonds outside the United States.
This week’s catalysts arrive on Wednesday and Thursday.
The Federal Reserve will announce its policy decision on Wednesday, with traders pricing in higher odds of a rate cut after the Justice Department closed its investigation into Fed Chairman Jerome Powell.
Megacap tech earnings from Alphabet, Microsoft, Amazon and Meta on Wednesday and Apple on Thursday represent about a quarter of the S&P 500’s market value.
Either the Fed or a strong earnings beat could provide the catalyst needed to push bitcoin through $80,000. Without one, the third rejection from the level begins to define the upper end of the range instead of preceding a breakout.
