Bitcoin climbed back above $70,000 on Wednesday following news that the United States and Iran had agreed to a Pakistan-brokered two-week ceasefire tied to the reopening of the Strait of Hormuz.
According to Crypto Slates According to data, the top crypto rose 5% to a peak of $72,734 before returning to $71,477 at the time of writing.
Facts from CryptoQuant showed that within two hours of the news, the top crypto recorded approximately $3 billion in taker buy volume on Binance’s derivatives markets, indicating how quickly investors repositioned themselves while hoping the situation continues to evolve positively.
Meanwhile, the ceasefire announcement also helped bring widespread relief to global markets. Brent crude fell 13.8% to $94.25, and US crude fell 15.4% to $95.52, while Germany’s DAX rose 4.7%, Japan’s Nikkei 225 rose 5.4% and South Korea’s Kospi rose 6.9%.
However, Bitcoin’s recent return above $70,000 is not the first time the flagship digital asset has climbed above that threshold following new peace signals in the US-Iran war.
Maksym Sakharov, co-founder and group CEO of WeFi, said CryptoSlate:
“Any time there is tension – geopolitical, macroeconomic and even institutional or micro – the weak investors and traders always get shaken out. The fear has now partly subsided with the ceasefire news, but sticking to the $70,000 limit would take more than just a ceasefire.”
As a result, the question arises whether the current rally can be sustained or whether BTC will experience another sell-off.
Oil is still the first link in the chain
The Strait of Hormuz remains central to the calculation of whether BTC can sustain its current upward movement.
About 20% of global oil exports pass through the waterway, meaning any disruption there poses a direct threat to energy prices, freight costs and inflation expectations.
During the recent escalation, reports indicated that about 130 million barrels of crude oil and 46 million barrels of refined fuel on about 200 tankers were stranded in the Gulf as traffic was disrupted.
As a result, Brent had risen 55% since February 28, and some physical oil markets had crude oil priced near $150 per barrel before the ceasefire was declared.
This partly explains why the market reaction was so sharp when the ceasefire was announced. Lower oil levels do not simply reduce one source of the overall risk. It also mitigates one of the most immediate threats to the global macro outlook: a prolonged energy shock could revive inflation just as central banks were looking for room to ease policy.
Notably, Chicago Fed President Austan Goolsbee had warned that the war was causing a stagflation shock, while research from the Dallas Fed suggested that a longer disruption from Hormuz could push US inflation above 4% by the end of the year.
However, with the new peace deal, told Josh Gilbert, market analyst at eToro CryptoSlate that the drop in oil prices was a signal that markets were beginning to price in a reopening of Hormuz.
He said this lower oil price is broadly supportive for global markets as it reduces pressure on consumers, moderates inflation expectations and removes some of the headwinds that have weighed on stocks in recent weeks.
That shift is crucial for Bitcoin. The flagship asset failed to move higher as oil prices rose and war fears increased. However, the price moved as oil fell, stocks rose and investors began to price in a less acute inflation shock.
The price is back above $70,000, but support is uneven
Bitcoin’s recent break through the $70,000 threshold was notable, but the trading pattern showed that conviction remains limited.
Earlier this month, Glassnode had explained that Bitcoin was trapped in a $60,000 to $70,000 range, with around 8.4 million BTC still underwater and a heavy supply cluster sitting between $80,000 and $126,000 above the market.
That creates two limitations at the same time. First, it means that many holders are still looking for higher prices to cut losses or exit. Secondly, it means that any move above $70,000 will still face significant overhead before it can develop into something more sustainable.
Beyond that, institutional interest in the top cryptocurrencies remains uneven as digital assets continue to record significant inflows and outflows.
American spot listed fund facts compiled by SoSoValue has seen sharp swings in recent weeks, with the nine funds recording outflows of $173.7 million on April 1, followed by inflows of $471.4 million on April 6, and then renewed outflows on April 7.
These figures show that top crypto still does not enjoy strong institutional support. This is because a market that can stay above $70,000 for weeks typically exhibits a more stable pattern of spot demand than a market that alternates between large inflows and large outflows in a few sessions.
Furthermore, the derivatives data also suggests that traders are not considering the latest move as a confirmed breakout.
Greeks.live said Bitcoin’s rise to $72,000 improved sentiment, mainly by easing fears of a black swan crash, rather than raising expectations for a sustained rise.
The company noted that BTC implied volatility on long-expiration options continued to decline, while implied volatility nearing expiration also declined.
It went on to say that although the negative skew diminished as the price rose, the broader message from options positioning was that traders had become less fearful of an immediate collapse and were unconvinced of a lasting upside regime.
What’s next for Bitcoin?
For Bitcoin to stay above $70,000 over the next two to six weeks, the ceasefire must do more than just survive the first cycle. Tanker traffic through Hormuz should normalize.
Oil should remain below the recent panic zone around or above $109. Inflation fears should recede rather than accelerate again. ETF flows should remain positive on balance, rather than fluctuating between single-day highs and single-day drawdowns.
If that happens, Bitcoin has a credible path to trade in a range of $70,000 to $78,000, with room toward the low $80,000s if spot demand strengthens and derivatives positioning no longer leans defensive.
Andre Dragosch, head of research at Bitwise in Europe, said a sustained break above $80,000 would be more likely to shift the market from bearish to bullish psychology as several key valuation and cost basis markers converge around that level.
However, if the truce is broken, shipping disruptions return and crude oil rebounds, the token could slide back to the $62,000 to $69,000 band that defined the market before this week’s move.