Bitcoin surged beyond the $78,000 threshold for the first time since February 4, as market sentiment shifted favorably following Iran’s declaration that the Strait of Hormuz is now “completely open,” at least during the ongoing ceasefire. Data reveals that the cryptocurrency not only hit the threshold but surged to an intraday high of $78,348. Despite a slight pullback shortly after, bitcoin’s surge resulted in a 24-hour gain of 4.1%, pushing its market capitalization close to $1.56 trillion. Since the start of April, bitcoin has surged over 14%, and it has increased by more than 20% since the onset of the conflict in the Middle East. Throughout February, the leading cryptocurrency found itself entrenched in range-bound trading, grappling with the formidable $70,000 resistance level.
However, by April, the narrative took a turn. A steady flow of reports suggesting a potential diplomatic breakthrough between Washington and Tehran has served as the main catalyst. This momentum culminated with the announced ceasefire between Israel and Lebanon—a pivotal concession long sought by Iranian negotiators—which seemed to pave the way for a broader U.S.-Iran accord. The restoration of traffic through the Strait of Hormuz has emerged as a macro catalyst, sparking a relief rally in both crypto and legacy markets as concerns over energy-driven inflation dissipate. Crude oil prices reacted sharply to the news: Brent crude dropped from around $100 per barrel to below $89, while WTI experienced a steep decline to $83 per barrel. The recent decline in energy costs has injected vital momentum into the equity markets, leading to a widespread rally.
European indices moved in unison, while the S&P 500—fresh off its achievement of surpassing the 7,000-point mark just a day earlier—continued its impressive ascent, gaining 102 points (approximately 1.5%) to close at 7,143.79. In the last 24 hours, the surge in bitcoin and the wider cryptocurrency market has been disastrous for short traders, resulting in nearly $650 million in short positions being liquidated. In a striking turn of events, Bitcoin experienced a staggering $273 million in short positions liquidated within just four hours, with the total reaching $358 million over the span of 24 hours. In a rallying market, it comes as no surprise that liquidated shorts on bitcoin represented almost 95% of the $380 million in overleveraged positions that were eliminated within a 24-hour period.
In total, liquidations within the cryptocurrency market reached a staggering $810 million. While the announcement may have averted the resumption of fighting, some observers caution that the Trump administration’s insistence on maintaining its blockade of shipping in and out of the Strait of Hormuz could jeopardize the agreement. As of now, reports indicate that Iran’s Islamic Revolutionary Guard Corps views the blockade as a violation.