Bitcoin Drops to $76,000 Following Iran's Reversal on Hormuz Strait

A major short squeeze took place in 2026, culminating in a single session. Bitcoin surged to $78,000 late on Friday, triggering liquidations worth $762 million across 168,336 traders, with $593 million of that amount attributed to short positions, according to CoinGlass. By Saturday evening, bitcoin had retreated to $76,091, representing a mere 0.8% increase for the day, after Iran declared that the Strait of Hormuz would be closed to maritime traffic once again, less than 24 hours following its foreign minister's announcement that it was fully open. Two tanker owners informed Bloomberg that their vessels received Iranian radio transmissions indicating the closure of the waterway, with one supertanker reporting gunfire and subsequently aborting its transit. The state news agency Nour stated that the Strait of Hormuz had reverted to 'strict management and control by the armed forces' in response to a US blockade of Iranian shipping, prompting several oil tankers that had been heading towards the strait on the initial reopening news to turn back. Friday's rally ultimately ended in a $590 million rout for shorts, 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, marking the cleanest short-heavy breakdown in a liquidation event since February. The setup for this event had been building for weeks, with funding rates on bitcoin perpetuals pinned in negative territory, indicating that shorts were paying longs a premium to hold their positions. The initial reopening of the Strait of Hormuz on Friday served as the catalyst, causing crude oil to drop nearly 10% to $85.90 per barrel and bitcoin to break above the $76,000-$78,000 zone that had capped every rally attempt since the February 5 crash. However, President Donald Trump's claim that Iran had agreed to an 'unlimited' suspension of its nuclear program was not confirmed by Tehran, and none of these developments survived into Saturday intact. The market pattern is now familiar, with ceasefire headlines driving a rally, only to be followed by a reversal headline before the breakout can consolidate, resulting in a forced unwind that sets up another opportunity to work against. Ether held up better than bitcoin during the retreat, declining by just 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 key 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 whipsaw, while a loss of this level would send bitcoin back into the same range it has been trapped in since March, this time with the short base that just got wiped looking to rebuild.