CryptoSlate
Bitcoin held near $78,000 on Friday as oil prices climbed past $100 a barrel, with Brent at roughly $107 and WTI near $97 — putting WTI on pace for a weekly gain above 17% after President Donald Trump escalated his rhetoric over the Strait of Hormuz, declaring the US Navy controlled the waterway and that no ship could pass without American approval. The flagship digital asset briefly traded above $79,000, extending its April recovery by roughly 15%, even as US stocks slipped and the dollar strengthened.
Why it matters
The Strait of Hormuz had been moving about 20 million barrels of oil and petroleum products per day before the conflict; shipping has since slowed sharply as Iran asserts authority over vessel passage and the US blocks Iranian maritime trade. Trump's Truth Social post — that the strait would remain "sealed up tight" until Iran reached a deal, paired with an order for the Navy to destroy Iranian boats laying mines — turned a formal ceasefire into a physical disruption that energy traders are pricing as longer-lasting. Brent back above $100 revived the playbook from earlier energy shocks: headline inflation stays elevated, central banks stay tighter for longer, and the dollar keeps bid.
For Bitcoin, that creates a forked setup. The bull case is financial repression — fading recession risk plus declining real rates if the Fed holds while inflation rises, with Bitwise Europe's Andre Dragosch pointing to a widening gap between Bitcoin and global money supply trends. The bear case is the same one that drove the March–April weakness: an oil-driven inflation shock lifts the dollar, pressures equity multiples, and drains liquidity from speculative assets.
Market impact
Most of Thursday's surge from $76,351 to $79,447 was a derivatives story, not a spot bid. CryptoQuant data showed open interest climbing from roughly $24.88B to nearly $28B as price moved higher, and Bitcoin short liquidations hit about $607.9M while Ethereum shorts took $581M — combined $1.19B forced buying. Long liquidations across both were a fraction of that at $111.4M, which is exactly the asymmetry that produces a fast, mechanical squeeze. Alphractal had flagged the setup: 30-day average funding had stayed negative for 46 straight days while open interest rose about 12%, a crowded-short configuration that unwound violently once price turned.
The options market is reading the move more cautiously.
Frequently asked questions
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Why is Bitcoin holding $78,000 while oil spikes above $100?
Because most of Thursday's push from $76,351 to $79,447 was a derivatives-driven short squeeze — Bitcoin short liquidations hit $607.9M and combined BTC+ETH short liquidations reached $1.19B. Forced buying, not fresh spot demand, did the heavy lifting above $79,000.
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What is the Strait of Hormuz's role in the current oil rally?
The strait normally moves about 20 million barrels of oil and petroleum products per day. Shipping has slowed sharply as Iran asserts authority over vessel passage and the US blocks Iranian maritime trade, turning a formal ceasefire into a physical supply disruption that has pushed Brent above $107 and WTI up 17% on…
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How much of Bitcoin's recent rally came from short liquidations?
The asymmetry was extreme. Bitcoin short liquidations reached $607.9M, Ethereum shorts took $581M, and combined short liquidations totaled nearly $1.19B. Long liquidations across both assets were just $111.4M — roughly 9% of the short side, which is the mechanical setup that produces a fast squeeze.
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What are options traders saying about the move?
Greeks.live data shows 109,000 BTC options expired Friday with a put-call ratio of 0.93 and max pain at $72,000. Implied volatility slipped 1-2 percentage points below 40% across major tenors and skew pulled back — traders are leaving room for continuation but are not paying up for upside calls.
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What is the Fed's role in whether Bitcoin can break $80,000?
The Fed faces a narrow lane: cutting into elevated oil could push real rates lower and support Bitcoin, while staying restrictive to contain inflation could drain liquidity from risk assets and weigh on BTC the same way it did during the March-April weakness. Bitwise Europe's Andre Dragosch flagged declining real…
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