Bitcoin Price Drops to $76,000 Following Iran's Closure of the Strait of Hormuz

The year 2026 witnessed one of its largest short squeezes, which occurred within a single session. Bitcoin reached a high of $78,000 on Friday, triggering the liquidation of $762 million across 168,336 traders, with $593 million of that amount being attributed to short positions, according to CoinGlass. However, by Saturday evening in Asia, the cryptocurrency had retreated to $76,091, resulting in a mere 0.8% increase for the day. This downturn was prompted by Iran's announcement that the Strait of Hormuz would be closed to maritime traffic once again, less than 24 hours after its foreign minister declared it fully open. Reports from two tanker owners indicated that their vessels received Iranian radio transmissions, with one supertanker even experiencing gunfire and being forced to abort its transit. The Iranian state news agency, Nour, stated that the strait had returned to 'strict management and control by the armed forces' in response to a US blockade of Iranian shipping. As a result, several oil tankers that had been heading towards the strait following the initial reopening news were forced to turn back. The breakout rally on Friday ultimately culminated in a $590 million rout of short positions, with bets on bitcoin accounting for $381 million in liquidations, the largest share, followed by ether shorts at $167 million. Shorts outweighed longs by nearly four to one, representing the most significant short-heavy breakdown in a liquidation event since February. The setup for this had been building over the course of several weeks, with funding rates on bitcoin perpetuals being pinned negative, indicating that shorts were paying longs a premium to hold their positions. The initial reopening of the Hormuz Strait on Friday served as the catalyst that triggered the price movement. Crude oil prices dropped by nearly 10% to $85.90 per barrel, and bitcoin broke above the $76,000-$78,000 zone that had capped every rally attempt since the February 5 crash. However, President Donald Trump's statement on Friday night that Iran had agreed to an 'unlimited' suspension of its nuclear program was not confirmed by Tehran, and the situation did not survive intact into Saturday. This market pattern is now familiar, where headlines of a ceasefire drive a rally, but a reversal headline arrives before the breakout can consolidate, resulting in a forced unwind that sets up another challenge. Despite the downturn, ether held up better than bitcoin, experiencing a decline of only 0.2% over 24 hours, while solana dropped 1.3% and dogecoin fell 2.1%. On a weekly basis, ether is still up 5.2%, XRP leads at 6.4%, BNB added 4.6%, and bitcoin sits at 4.5%. The question now is whether the $76,000 zone will hold into Monday's open. A clean weekly close above $76,000 would preserve the structural break, even if the peace trade continues to be volatile. Conversely, a loss of this level would result in bitcoin returning to the same range it has been trapped in since March, only this time with the short base that just got wiped out looking to rebuild.