Bitcoin has been rejected at $79,000 three times in eight sessions. The level now defines the range.
Bitcoin was trading at $76,923 on Tuesday morning, down 2.4% in 24 hours after rising to $79,399 on Monday and reversing throughout 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 declined 1.8% to $625. The entire top 10 closed in red 24 hours outside of Tron and Dogecoin.
Brent crude rose 1% to above $109 a barrel, extending its rally to a seventh day after Iran’s proposed interim deal to reopen the Strait of Hormuz failed to advance over the weekend. The White House said U.S. officials were discussing 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 stocks supported by the Bank of Japan’s 6-3 split decision to leave policy unchanged. The yen strengthened 0.3% to around 159 units per dollar.
Two readings of the bitcoin tape are circulating among market analysts.
Galaxy Digital’s Mike Novogratz said in a note that US retail investors have returned to the market and the combination of retail demand, institutional capital and limited supply creates the foundation for further gains. Data from Santiment shows that whales accumulated more than 40,000 BTC in the last two weeks, and the company noted a strong shift in sentiment from fear to fear of missing out in a short period.
Analysis firm CryptoQuant has the opposite opinion. Founder Ki Young-Ju said in an
Perpetual futures funding rates on major exchanges remain negative for 7 days, at -0.13% by Coinglass, meaning shorts are still paying longs to hold positions, the pattern that historically precedes both short squeezes and the resolution of short squeezes.
The two views are not mutually exclusive. Spot demand from retail and institutions may be returning at the same time as the rally towards $79,000 was fueled from the beginning by short covering. The test is whether the next attempt to reach that level will generate new spot bids or whether they will run out of short positions to squeeze.
Corporate buildup continues regardless. Strategy bought $3.9 billion in bitcoin in April according to Bloomberg, the company’s largest monthly accumulation in a year.
Japanese company Metaplanet on Tuesday announced a $50 million bond issue to finance new bitcoin purchases, the latest in a series of yen-denominated debt deals the company has used to build one of the largest corporate bitcoin treasuries outside the United States.
The catalysts of the week arrive on Wednesday and Thursday.
The Federal Reserve announces its policy decision on Wednesday and traders price higher odds of a rate cut after the Justice Department closed its investigation into Federal Reserve Chair Jerome Powell.
Mega-cap tech gains from Alphabet, Microsoft, Amazon and Meta on Wednesday and Apple on Thursday represent about a quarter of the S&P 500’s market cap.
Either the Federal Reserve or a sharp rise in earnings could provide the catalyst needed to push bitcoin above $80,000. Without one, the third rejection of the level begins to define the upper end of the range rather than preceding a breakout.
