Bitcoin briefly climbed to $74,942, pushing close to the $75,000 level before easing back to around $73,141 at the time of publication. The move came as markets reacted to China’s rejection of reports linking it to military support for Iran, while also pricing in tariff threats from Donald Trump, tension around the Strait of Hormuz, and a sharp wave of short liquidations in crypto derivatives.
China rejects arms allegations as Trump threatens 50% tariffs
Chinese Foreign Ministry spokesperson Guo Jiakun said Beijing “always acts prudently and responsibly on the export of military products” and called the media reports “purely fabricated.” His comments followed US intelligence assessments that China was preparing to send air defense systems to Iran, though public details remained limited.
Trump then posted on Truth Social that any country supplying military weapons to Tehran would face an immediate 50% tariff on all goods sold into the United States, with “no exclusions or exemptions.” US-China relations have already produced sharp swings across equities and crypto over the past year. The report noted that last year’s announcement of a 100% tariff on Chinese products wiped out nearly $200 billion in crypto market value almost overnight.
Hormuz tension shifts capital toward oil and gold
Trade positioning changed after the US ordered a blockade of Iran’s key Strait of Hormuz shipping corridor following a breakdown in talks. Oil markets reacted quickly. Data showed a notable rise in long positions in WTI crude futures, and gold saw a similar pattern.
Capital.com said oil traders moved heavily into long positions, while traders across four major currency pairs shifted mostly to net short exposure during the period of heightened tension. Monte Safieddine, the platform’s Head of Market Research, said US action in the Strait of Hormuz and changing equity index behavior were driving profit-taking in risk assets. Positioning in US stocks also softened, with the share of S&P 500 traders holding longs dropping from 64% to 61%, while Dow traders cut long exposure from 67% to 60%.
Short squeeze and ETF inflows add fuel to Bitcoin’s jump
Bitcoin’s weekend rally accelerated as a sizeable short squeeze liquidated about $89 million in bearish derivatives positions. Spot Bitcoin ETF inflows added another source of support. BlackRock’s IBIT alone drew $269 million in a single day, helping strengthen bullish momentum.
Gemini co-founder Cameron Winklevoss pointed to Bitcoin’s repeated recoveries with a social post that read: “Why is bitcoin hitting $74k? I thought bitcoin was dead?” The comment echoed a familiar market theme around Bitcoin’s resilience after repeated calls for its decline.
Analysts warn that strong sentiment and thin volume can reverse fast
The rally has not removed caution from the market. Michael Nadeau, founder of DeFi Report, said strong conviction paired with low trading volume had previously appeared before market downturns in 2022. He wrote, “BTC does not bottom when everyone thinks the bottom is in… sentiment suggests the average investor is already allocated.”
Whether Bitcoin can hold above $74,000 now appears tied to how the standoff between China and the US develops, and whether aggressive rhetoric turns into actual policy measures.