Hassan Maishera
TL;DR
- Bitcoin falls below $77K after failing to break $79K multiple times.
- Analysts are split between bullish spot demand and a short-squeeze-driven rally.
Bitcoin loses $77,000 as Hormuz Standoff Lifts Oil to 3-Week High
Bitcoin (BTC) extended its pullback on Tuesday, dropping below $77,000 after failing to sustain a breakout above the $79,000 level for the third time in just over a week.
The repeated rejection is increasingly defining a short-term trading range for the leading cryptocurrency.
BTC traded around $76,800 in early Tuesday sessions, down roughly 2.4% over the past 24 hours after briefly climbing to $79,399 on Monday before reversing.
The decline comes as macro pressures are also building. Brent crude climbed above $109 per barrel, extending a seven-day rally amid stalled negotiations over reopening the Strait of Hormuz following Iran’s interim proposal.
Meanwhile, U.S. officials continue discussions but maintain firm conditions on any resolution to the ongoing eight-week conflict.
Market Participants Remain Divided on Bitcoin’s Next Move
On the bullish side, Mike Novogratz of Galaxy Digital pointed to renewed U.S. retail participation alongside institutional inflows and constrained supply as a setup for further upside.
Supporting this view, Santiment data shows whales have accumulated over 40,000 BTC in the past two weeks, with sentiment rapidly shifting toward FOMO.
However, a more cautious perspective comes from Ki Young Ju, founder of CryptoQuant. He argues that Bitcoin’s recent surge toward $79,000 was largely driven by a derivatives-led short squeeze rather than organic spot demand. If accurate, this raises the risk of a pullback once short-covering momentum fades.
Derivatives data support some of this caution. Funding rates across major exchanges remain negative on a seven-day basis at around -0.13%, according to CoinGlass.
This indicates that short sellers are still paying long positions — a setup that can precede both squeezes and subsequent unwinds.
While spot demand appears to be improving, the sustainability of any breakout above $79,000 will depend on whether fresh buying pressure emerges or if the market runs out of short positions to liquidate.
Corporate accumulation continues to provide a structural tailwind. Strategy reportedly purchased $3.9 billion worth of Bitcoin in April — its largest monthly buy in a year.
Meanwhile, Metaplanet announced a $50 million bond issuance to fund additional BTC purchases, reinforcing its position as one of the largest corporate holders outside the U.S.
Looking ahead, markets are bracing for key catalysts. The Federal Reserve will announce its policy decision on Wednesday, with traders increasingly pricing in a potential rate cut.
At the same time, earnings from major tech firms — including Alphabet, Microsoft, Amazon, Meta, and Apple — could significantly influence broader market sentiment.
A dovish Fed signal or strong earnings performance may provide the momentum needed for Bitcoin to break above $80,000. Without such catalysts, repeated rejections near $79,000 risk cementing the level as a firm ceiling rather than a stepping stone to new highs.
