Bitcoin Drops to $76,000 Following Iran's Re-closure of the Strait of Hormuz

A major short squeeze occurred and dissipated within a single session in 2026. Bitcoin surged to $78,000 late on Friday, prompting $762 million in liquidations across 168,336 traders, with $593 million of those losses occurring on the short side, according to CoinGlass. By Saturday evening in Asia, bitcoin had retreated to $76,091, posting a modest 0.8% daily gain, 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 development led to two tanker owners reporting Iranian radio transmissions that resulted in the closure of the waterway, with one supertanker even experiencing gunfire and aborting its transit. In response to a U.S. blockade of Iranian shipping, state news agency Nour stated that the Strait of Hormuz had returned to 'strict management and control by the armed forces'. Several oil tankers that had proceeded towards the strait following the initial reopening news were forced to turn back. The breakout rally on Friday culminated in a $590 million rout of short positions, with bets on bitcoin accounting for $381 million in liquidations, the largest share, followed by $167 million in ether shorts. Shorts outnumbered longs by nearly four to one, marking the most pronounced short-heavy breakdown in a liquidation event since February. This setup had been building for weeks, with funding rates on bitcoin perpetuals remaining negative, indicating that shorts were paying longs a premium to maintain their positions. The catalyst for the flip was the initial reopening of the Strait of Hormuz on Friday, which led to a 10% drop in crude oil prices to $85.90 per barrel and propelled bitcoin above the $76,000-$78,000 zone that had capped every rally attempt since the February 5 crash. However, these developments were short-lived, as 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. The market pattern that has emerged is one 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 that sets up another challenge. Ether performed relatively better than bitcoin during the retreat, posting a 0.2% loss over 24 hours, while solana and dogecoin fell 1.3% and 2.1%, respectively. On a weekly basis, ether is still up 5.2%, XRP leads with a 6.4% gain, BNB has 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 experience whipsaws. A loss of this level would result in bitcoin returning to the same range it has been trapped in since March, this time with the short base that just got wiped out seeking to rebuild.