Bitcoin Retreats to $76,000 Following Iran's Closure of Hormuz Strait

A major short squeeze occurred on Friday, with bitcoin reaching $78,000 and triggering $762 million in liquidations across 168,336 traders, $593 million of which were short positions. However, by Saturday evening, bitcoin had fallen back to $76,091, a mere 0.8% gain on the day, after Iran announced the reclosure of the Strait of Hormuz. This move was reportedly in response to a US blockade of Iranian shipping, with state news agency Nour stating that the strait was under 'strict management and control by the armed forces'. The initial reopening of the strait had led to a breakout rally, resulting in a $590 million shorts rout, with bitcoin accounting for $381 million in liquidations. The setup for this event had been building for weeks, with funding rates on bitcoin perpetuals pinned negative, indicating that shorts were paying longs a premium to hold their positions. The rally was short-lived, with crude oil dropping nearly 10% to $85.90 per barrel and bitcoin breaking above the $76,000-$78,000 zone. However, the market pattern is now familiar, with ceasefire headlines driving rallies, only to be followed by reversal headlines that lead to a forced unwind. Ether held up better than bitcoin on the retreat, down just 0.2% over 24 hours, while solana and dogecoin fell 1.3% and 2.1%, respectively. The question now is whether the $76,000 zone will hold into Monday's open, with a clean weekly close above $76,000 necessary to preserve the structural break.