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

The largest short squeeze of 2026 occurred in a single session, with bitcoin reaching $78,000 on Friday before pulling back to $76,091 by Saturday evening. This decline came as Iran announced the closure of the Strait of Hormuz to maritime traffic, less than 24 hours after its foreign minister declared it fully open. The 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 closure led to a $590 million rout of shorts, 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 initial reopening of the Strait of Hormuz on Friday was the catalyst that triggered the short squeeze, with crude oil dropping nearly 10% to $85.90 per barrel and bitcoin breaking above the $76,000-$78,000 zone. However, the rally was short-lived, as the market pattern of ceasefire headlines driving a rally, followed by a reversal headline, has become familiar. The forced unwind has set up another opportunity for the market to work against. Other cryptocurrencies, such as ether, solana, and dogecoin, also experienced declines, although ether held up better than bitcoin. The question now is whether the $76,000 zone will hold into Monday's open, with a clean weekly close above $76,000 preserving the structural break, even if the peace trade continues to whipsaw the market.