Bitcoin Drops to $76,000 After Iran Re-Closes Hormuz Strait

The year 2026 witnessed one of its largest short squeezes, which occurred and subsided within a single session. Bitcoin reached a high of $78,000 on Friday evening, triggering liquidations worth $762 million across 168,336 traders, with $593 million of these being short positions, according to CoinGlass. By Saturday evening in Asia, bitcoin had retreated to $76,091, posting a mere 0.8% gain for the day, after Iran announced the re-closure of the Strait of Hormuz to maritime traffic, less than 24 hours after its foreign minister declared it fully open. This move was reportedly in response to a U.S. blockade of Iranian shipping, with state news agency Nour stating that the strait had returned to 'strict management and control by the armed forces.' Two tanker owners informed Bloomberg that their vessels received Iranian radio transmissions, ordering the closure of the waterway, with one supertanker even reporting gunfire and subsequently aborting its transit. The initial reopening of the strait on Friday had sparked a breakout rally, which ultimately ended in a $590 million rout for shorts, with bitcoin accounting for $381 million in liquidations, followed by ether at $167 million. The setup for this event had been building over weeks, with funding rates on bitcoin perpetuals pinned negative, indicating that shorts were paying longs a premium to hold their positions. The catalyst for the rally was the initial reopening of the Hormuz Strait, which led to a 10% drop in crude oil prices to $85.90 per barrel and pushed bitcoin above the $76,000-$78,000 zone that had capped every rally attempt since the February 5 crash. However, the rally was short-lived, as President Donald Trump's claim that Iran had agreed to an 'unlimited' suspension of its nuclear program was not confirmed by Tehran, and the market pattern that has become familiar in recent times repeated itself, where ceasefire headlines drive a rally, only to be followed by a reversal headline that arrives before the breakout can consolidate, resulting in a forced unwind. Ether performed relatively better than bitcoin during the retreat, posting a 0.2% loss over 24 hours, while solana and dogecoin dropped 1.3% and 2.1%, respectively. On a weekly basis, ether is still up 5.2%, with XRP leading at 6.4%, BNB adding 4.6%, and bitcoin sitting at 4.5%. The key question now is whether the $76,000 zone can hold into Monday's open, as a clean weekly close above $76,000 would preserve the structural break, even if the peace trade continues to whipsaw the market. A loss of this level would see bitcoin return to the same range it has been trapped in since March, but this time with the short base that just got wiped out looking to rebuild.