Key Takeaways
- Bitcoin hit a 3-month peak of $80,617 on May 4, possibly signaling the end of the latest crypto winter.
- Volatility caused $554 million in liquidations as Brent crude hit $115 amid Strait of Hormuz tensions.
- Economists warn of a global recession unless the Trump administration and Iran reach a peace agreement.
Ending the Crypto Winter
Bitcoin regained its stride Monday, bouncing back above $80,000 after early morning jitters tied to Middle East tensions. Though the top cryptocurrency dipped to a session low of $78,203 around 6:30 a.m. EDT, it surged past $80,500 by midmorning, effectively erasing its losses and reclaiming momentum from Sunday night’s rally.
Prior to that intraday dip, bitcoin had surged to a commanding $80,617, marking a fresh three-month peak. This aggressive rally pushed the asset’s total market capitalization north of the $1.6 trillion milestone—a psychological breakthrough that solidified the narrative that the industry has finally emerged from its latest “ crypto winter.”
While several factors fueled the rise, some analysts tied the initial surge to reports that the U.S. Navy would escort shipping vessels stranded in the Strait of Hormuz. The risky move by the U.S. followed a weekend of sharp rhetoric between Washington and Tehran; the latter seized control of the vital shipping channel shortly after hostilities began.
While the blockade increased pressure on Iran, its refusal to give in to U.S. demands to reopen the strait to commercial ships has caused oil prices and inflation to rise. With the war increasingly unpopular at home, the Trump administration—eager to placate voters ahead of the midterm elections—began deploying warships to flashpoints to launch the escorts. U.S. officials revealed Monday that two American-flagged vessels had already passed through without incident.
However, reports of attacks on shipping vessels and claims by Iran’s Islamic Revolutionary Guard Corps that it repelled advancing U.S. Navy ships rattled markets. Although U.S. Central Command dismissed the Iranian version of events, the situation has clearly escalated. A fire at the Fujairah oil terminal and claims by the United Arab Emirates that it intercepted missiles launched from Iran underscored the growing danger.
For shipping companies, the latest episode suggests that unless the two belligerents reach a permanent peace agreement, normal transit through the channel will not resume. As a resolution stalls, economists say the prospects of a global recession are growing.
Following the skirmishes, oil prices rose, with Brent crude briefly reaching $115 per barrel and West Texas Intermediate jumping 3.3% to $105 per barrel. On Wall Street, the main indices were marginally lower at the time of writing after taking heavy losses earlier in the day. Bitcoin, conversely, reversed its early morning losses to bring its 24-hour gains back above 2%.
The price action saw nearly $270 million in leveraged bitcoin positions wiped out, with liquidated shorts accounting for close to $212 million. Overall, volatility across the cryptocurrency market resulted in $384 million in short bets and $170 million in long positions being liquidated.
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After a 13% gain in April, Bitcoin spiked over $2,000 on the first day of May to reach an intraday…
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After a 13% gain in April, Bitcoin spiked over $2,000 on the first day of May to reach an intraday…
Traders Push Bitcoin Near $79,000 Resistance, Wiping $120M in Bearish Positions
After a 13% gain in April, Bitcoin spiked over $2,000 on the first day of May to reach an intraday…
