Bitcoin rebounds to $72,500 as markets react to US Strait of Hormuz blockade

Bitcoin reversed its losses after Monday’s Wall Street open as markets digested the newest developments in the US-Iran war.

Bitcoin and markets react to the Strait of Hormuz blockade

Data from TradingView showed BTC price action turning higher, reaching $72,530 on Bistamp.

The US blockade of the Strait of Hormuz began Monday at 10 a.m. EDT. Markets appeared relieved that shipping traffic not going to or from Iranian ports would be unaffected.

Analysis cited by The Kobeissi Letter said the US would “not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports.” The post also warned that a successful blockade of Iranian ports would cut off the majority of the already restricted oil exports from the region, adding that US gas prices could hit $4.25 per gallon.

WTI crude oil was trading around $102 per barrel after briefly retesting the $100 level early in futures trading.

US stocks also offset the initial downside from news that US-Iran negotiations had failed. At the time of writing, both the S&P 500 and Nasdaq Composite Index were green.

China’s trade exposure and enforcement risk

QCP Capital said the increasing role of Chinese trade is a key factor in the Iran-related developments. In its “Market Color” update, QCP noted that “China sits at the centre of this,” arguing that Iranian crude largely flows east and that any blockade would cut directly into Beijing’s supply chain.

QCP added that “even with a strong US naval presence, the question is not intent but enforcement,” warning that intercepting Chinese vessels in international waters would risk a larger escalation that markets are not priced for.

QCP said markets were leaning on a familiar pattern—“rhetoric escalates, reality softens”—and that “crypto is reflecting that view,” with implied vols and risk reversals drifting back toward pre-conflict levels, a sign that “panic has faded even if uncertainty has not.”

Crypto traders keep a risk-off stance on short-term BTC

Despite the relief bounce, traders maintained a risk-off stance on short-term BTC price action.

“Bart Simpson” pattern and key level watch

Trader Jelle warned that BTC/USD may form a “Bart Simpson” failed breakout pattern, which he said could effectively erase gains from earlier in April. He advised followers to watch $70.5k, adding that losing that level could lead to a full retrace of the “ceasefire” pump.

Daily bear flag risk and range-bound outlook

In a previous post, Jelle said Bitcoin’s bear flag pattern on daily time frames was “still in play,” with the potential to repeat January’s price action and risk new macro lows.

Separately, trader Cryp Nuevo said there were few actionable moves in the current trading range, describing the chart as “the clearest chart in a long time” and advising to wait for price to trade at one of the extremes.

Cryp Nuevo flagged the $59,000 to $61,000 area for entering swing long positions.