Bitcoin experienced a dramatic intraday reversal on April 29, surging to $77,882 before collapsing to $75,100, erasing early gains and triggering widespread sell-offs. The sharp move came against the backdrop of the Federal Reserve's widely anticipated decision to maintain interest rates and intensifying geopolitical tensions in the Middle East.
Price Action: Two Bullish Waves Wiped Out by Selling Pressure
Throughout most of Tuesday, bitcoin traded in a tight range around $76,200, consolidating after a mild pullback from the previous session. However, late in the evening (ET), the first of two buying waves emerged, pushing the asset above the psychologically important $77,000 level. After several hours of consolidation, a second wave of buying, starting around 5:30 AM ET, catapulted the price to an intraday peak of $77,882. But that proved to be the top: a rapid sell-off erased all the session's gains within hours. By 1:00 PM ET, bitcoin was trading near $75,100, a 24-hour drop of 1.3%, turning its weekly return negative despite an overall double-digit monthly gain. The market capitalization of the largest cryptocurrency stood at $1.52 trillion.
Federal Reserve Holds Rates at 3.5%-3.75%
The FOMC voted to keep the federal funds rate unchanged at 3.50%-3.75%, pausing the rate-cutting cycle that had been widely expected to continue. In his final press conference as Fed Chair, Jerome Powell justified the decision by citing “elevated” inflation in the energy sector and heightened risks from the Middle East conflict. Powell, who recently faced personal attacks from Trump administration officials, reiterated that the Fed remains data-dependent. The decision itself was not a surprise, but the market's reaction underscored how sensitive risk assets remain to any signals of monetary tightening or delay in easing.
Middle East and Oil: A Renewed Threat to Crypto Liquidity
The second key factor behind the volatility is the deteriorating geopolitical landscape. Brent crude oil prices have returned to levels last seen before the short-lived US-Iran ceasefire. Reports indicate the Trump administration intends to maintain a tight blockade on Iranian oil exports, with diplomatic progress seemingly stalling. Retired four-star General Jack Keen and other figures have reportedly advocated for military strikes as leverage to bring Tehran back to the negotiating table. Analysts warn that any renewed strikes on Iranian targets would almost certainly trigger a regional conflict, likely targeting critical energy infrastructure in Gulf states. Even a de-escalation in the Strait of Hormuz would not be enough to stabilize sentiment, as markets are beginning to price in the possibility of a global energy market returning to a price-war and market-share competition regime.
Bitunix analyst commented: “This shift matters through the inflation and liquidity channel. A renewed rise in energy costs will directly limit the market's ability to price in aggressive Fed easing. While BTC may maintain a relatively strong risk-asset structure in the short term, if elevated oil prices persist, expectations for future liquidity conditions could come under pressure once again.”
Market Outlook: Resilience Amid Headwinds
Despite the April 29 drop, bitcoin remains on track to close April with double-digit gains, highlighting its underlying resilience. However, the macro headwinds—the Fed's pause on rate cuts, the uncertainty of the Middle East conflict, and the pass-through of higher oil prices to inflation—are testing cryptocurrency's status as a risk-on asset. In the coming weeks, traders will closely monitor the Fed's forward guidance and any diplomatic breakthroughs in the Middle East. Sustained high oil prices could further pressure medium-term liquidity expectations for bitcoin and the broader crypto economy. Conversely, a de-escalation could provide a temporary relief rally for risk assets.