Fresh comments from U.S. President Donald Trump triggered a flash sell-off in Bitcoin, pulling the top cryptocurrency from a weekly high of $79,449 down to $78,326 on April 23. The move coincided with escalating geopolitical tensions in the Strait of Hormuz, as risk-off sentiment swept across financial markets.
Strait of Hormuz Crisis Intensifies, Oil Surges
Trump stated on social media that there was no set date for ending the ceasefire or going to war with Iran, further questioning Iran's leadership position. This added uncertainty to an already fragile peace process. Meanwhile, the U.S. Department of Defense announced the seizure of another Iranian oil tanker in the Indian Ocean. Reports then emerged that Iran had attacked three cargo ships in the Strait of Hormuz, capturing two of them. The chief Iranian negotiator confirmed that initial revenues had been received from ships passing through the strait, heightening regional tensions to a boiling point.
As the world's most critical oil transit route, the Strait of Hormuz's instability pushed oil prices sharply higher. Bitcoin, which had recently benefited from rising risk appetite, adopted a more cautious pricing stance amid these developments.
“Following Trump's public order to target any Iranian vessel laying mines, market volatility surged, prompting investors to take a more defensive stance,” noted market analysts.
Bitcoin's Weekly Gains Intact, Institutional Demand Supports
Despite the notable retreat from $79,000, Bitcoin still maintains a much stronger position compared to previous months. The cryptocurrency had rallied about 7.5% earlier in the week. In contrast to the subdued trading seen in February and March, overall market sentiment remains relatively positive.
The Crypto Fear and Greed Index recently improved from “Extreme Fear” to “Fear,” indicating that the market is less risk-averse than at the start of the year. Despite recent price swings, Bitcoin has held above key support levels, reflecting ongoing stability.
Institutional investor demand continues to underpin confidence. Strategic management firms reportedly purchased approximately $2.5 billion worth of BTC this week, reinforcing their reserves. This robust demand has helped sustain interest in Bitcoin even amid geopolitical headwinds.
Futures Market Inflows Drive Recent Momentum
Analysts point out that the latest rally was predominantly fueled by demand in the derivatives markets. While trading volumes in spot markets remained weak, there was a marked uptick in perpetual futures contract activity.
“The recent rally was driven entirely by demand from the futures market, while spot market interest, though still subdued, is slowly recovering,” said Julio Moreno, CEO of CryptoQuant.
A similar pattern appeared in January, when Bitcoin surged toward $98,000 on the back of derivatives-driven momentum. Market watchers are now closely monitoring whether the current drop will prove temporary or trigger a broader correction. Crypto analyst Michaël van de Poppe sees the pullback from $79,000 as a typical price movement. Based on his chart analysis, as long as Bitcoin holds within the $73,000-$75,000 range, there remains potential for the price to climb toward $85,000-$88,000 over the next two weeks.
Overall, Bitcoin has shown resilience in the face of short-term geopolitical shocks, but investors should remain alert to potential further volatility.