Oil price surges 8% on Iran tensions: Five things to know in Bitcoin this week

Bitcoin preserved $70,000 at the weekly close as markets began reacting to a breakdown in US-Iran negotiations and blockade of the Strait of Hormuz.

Bitcoin (BTC) held $70,000 at the weekly close as markets reacted to a breakdown in US-Iran negotiations and escalating tensions around the Strait of Hormuz.

A breakdown in US-Iran negotiations sends oil surging above $100 per barrel, with the Strait of Hormuz now blockaded.

US PPI inflation data is due amid signs that the oil crisis is far from the only driver of price increases.

Bitcoin manages a weekly close above $70,000, but a trader says new lows remain on the roadmap.

Profit-taking is what keeps Bitcoin unable to hold the $70,000 mark for long, analysis confirms.

Overall sell-side pressure is easing, while long-term holders boost BTC exposure on Binance.

The US-Iran war is once again the main topic of debate among market participants after the sudden breakdown in negotiations over the weekend.

On Sunday, US President Donald Trump announced sweeping measures to blockade the Strait of Hormuz with an eye to controlling oil transport in the future.

In one of several posts on Truth Social, Trump wrote that “at some point, we will reach an ‘ALL BEING ALLOWED TO GO IN, ALL BEING ALLOWED TO GO OUT’ basis” on Hormuz.

“It appears that Trump's long-term plan is to blockade Hormuz, gain control, then begin letting traffic flow freely,” trading resource The Kobeissi Letter commented in a response on X. 

Fears immediately focused on markets’ reaction, but this ended up tempered, with S&P 500 futures losing around 0.6%. Oil, however, gained rapidly, trading near $105 per barrel after 8% daily upside.

Kobeissi added that in the absence of diplomacy, Hormuz now appeared to be the US’ “top priority” going forward.

“We expect a volatile week ahead,” it added.

As Cointelegraph reported, oil prices have a pronounced impact on US inflation gauges, notably the Consumer Price Index (CPI), which was released last week.

The coming days will see the March print of the Producer Price Index (PPI), this also set to reflect the start of the war.

Commenting, trading resource Mosaic Asset Company warned that recent inflation data was already pointing to catalysts beyond the conflict.

“While headlines coming out of the Middle East are capturing investor attention, a pair of consumer inflation reports released last week continues showing upward pressure on prices,” it wrote in the latest edition of its regular newsletter, “The Market Mosaic.”

Mosaic flagged both CPI and Federal Reserve’s “preferred” measure, the Personal Consumption Expenditures (PCE) index, the latest update for which was released on April 9.

PCE revealed “more recent annualized rates over the past three and six months are accelerating higher.”

“That shows inflation pressures outside of what’s expected following war in the Middle East and impact on energy prices,” Mosaic added.

As a result, the Fed may end up enacting “tighter” monetary policy, keeping interest rates steady or even raising them, despite repeated demands by Trump and other officials to do the opposite.

The latest data from CME Group’s FedWatch Tool shows that markets already see no rate cuts coming before the second half of 2027.

Bitcoin often exhibits volatile reactions to US inflation reports, particularly when those differ considerably from expected values. 

Bitcoin managed to avoid major losses on the back of the latest geopolitical setback, wicking to near $70,500, per data from TradingView.

The weekly close at around $70,850 thus preserved key price levels in the form of the 200-week exponential moving average (EMA) trend line and the old 2021 all-time high.

With the spot trading range still narrowing, trader Roman said that a true high-time frame (HTF) trend flip required another BTC price correction.

$BTC 1WWe are here - compared to 2022.This is not the bottom. pic.twitter.com/It6OGj1BX5

“Why haven’t we bottomed yet? Because AT LEAST 1 more low would give us reversal signals on HTF,” he told X followers in a post on Sunday.

Roman has long been among those calling for deeper long-term lows for BTC/USD, with his targets circling the $50,000 mark.

One of the prerequisites for abandoning the bear market, he said, was a bullish divergence on the relative strength index (RSI) versus price.

“RSI bull divs, bear momentum loss, likely see volume start to shift, & possible reversal pattern. All things we saw at the 2022 bottom,” he added.

As Cointelegraph reported, RSI is already beginning to offer key bullish signals, with another trader saying that the indicator was copying the end of the 2022 bear market “nearly perfectly.”

Macro events aside, Bitcoin continues to suffer from a familiar problem on short time frames, analysis says.

In an X post at the weekend, onchain analytics platform Glassnode said that each time BTC/USD passes $70,000, the urge to take profit among traders results in the rally quickly fizzling.

“Another bounce to >$70k range was exhausted by >$20M/Hour profit realization,” it confirmed.

The phenomenon was recorded last week after Bitcoin made multiple attempts to flip the $70,000 to support.

“As price probed the $70K region, Realized Profit/hour spiked above $20M, signalling a local exhaustion,” Glassnode wrote at the time.

Talk of Bitcoin “short squeezes” getting easier has surfaced among analysts recently amid increasing signs of seller exhaustion.

Related: Bitcoin analysis sees $55K BTC price 'iron bottom' by December 2026

In its latest commentary, onchain analytics platform CryptoQuant added evidence to support the theory that bulls could retake control of the market at current levels.

“Bitcoin’s short-term holder pressure on Binance has entered a calmer phase,” contributor Amr Taha reported in one of its “Quicktake” blog posts on Monday.

Taha referred to more recent Bitcoin investor cohorts hodling coins for up to six months without selling.

“The 7-day standard deviation of realized profit/loss pressure fell to 217, marking its lowest reading since February, compared with the previous low of 277,” he reported about their profit/loss ratio. 

A further post additionally revealed rising demand for BTC on major global exchange Binance.

“Bitcoin is showing a healthier holding structure as whale transfer pressure to Binance continues to ease while long-term holder demand strengthens,” Taha added.

The increase in long-term holders’ realized cap — the combined value of their BTC holdings when they last moved — passed the $50 billion mark for the first time in nearly a year this week.

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Source: CoinTelegraph