Bitcoin held near $78,000 on Friday as oil prices climbed past $100 a barrel, testing whether the largest digital asset can sustain its April rebound while the US-Iran conflict keeps energy markets on edge.
The move came after President Donald Trump escalated his rhetoric over the Strait of Hormuz, saying the US Navy controlled the waterway and that no ship could enter or leave without American approval.
The comments reinforced fears that the conflict, now centered on maritime leverage rather than direct strikes, could keep one of the world’s most important energy routes shut for longer.
Brent crude rose to about $107 a barrel, while West Texas Intermediate traded near $97. WTI was on pace for a weekly gain of more than 17% as stalled peace talks, tanker seizures, and the continuing blockade of Hormuz deepened concerns over supply.
Bitcoin’s response was more measured. The flagship digital asset rose to $78,300 after briefly trading above $79,000 and extended its April recovery by roughly 15%.
The advance came even as US stocks slipped, the dollar strengthened, and traders repriced the risk that higher oil could keep inflation elevated into the Federal Reserve’s next policy meeting.
That combination has turned Bitcoin into a cleaner test of the market’s inflation trade. Traders are weighing whether the token can benefit from renewed demand for scarce assets while avoiding the pressure that a stronger dollar and higher real yields usually place on speculative markets.
Oil returns to the center of the Bitcoin trade
The Strait of Hormuz has become the main channel through which the US-Iran conflict is reaching global markets.
Before the war, about 20 million barrels of oil and petroleum products moved through the waterway each day.
However, shipping has since slowed sharply, with Iran demanding authority over vessel passage and the US blocking Iranian maritime trade. The result is a physical disruption that has carried more weight for traders than the formal ceasefire.
Trump sharpened that pressure Thursday, saying on Truth Social that the US had “total control” over the strait and that it would remain “sealed up tight” until Iran reached a deal. He also ordered the Navy to destroy Iranian boats laying mines in the waterway.
Oil traders quickly priced the risk of a longer disruption. Brent’s move above $100 revived memories of earlier energy shocks that fed headline inflation and forced central banks to keep policy tighter for longer.
For Bitcoin, that creates a complicated backdrop.
Higher oil supports the argument that investors should own assets outside the fiat system, especially if inflation rises while central banks avoid additional tightening. At the same time, an oil-driven inflation shock can lift the dollar, pressure equity valuations, and reduce liquidity across risk assets.
The first version of that trade helped Bitcoin hold its ground on Friday. The second remains the main risk for traders looking for a clean break above $80,000.
Futures traders drive the move
The strongest part of Bitcoin’s rally in this market resilience came from derivatives.
CryptoQuant data showed that Bitcoin’s Thursday surge from $76,351 to $79,447 was driven mainly by futures activity.
According to the firm, open interest climbed from about $24.88 billion to nearly $28 billion as the price moved higher, a pattern that points to leveraged positioning rather than a broad spot-market bid.
The rally forced a large exit from bearish positions. Bitcoin short liquidations reached about $607.9 million, while Ethereum short liquidations totaled about $581 million. Across the two assets, short liquidations totaled nearly $1.19 billion.
Long liquidations were much smaller. Bitcoin long liquidations totaled about $12.8 million, while Ether long liquidations reached about $98.5 million. Combined long liquidations totaled nearly $111.4 million.
That imbalance explains the speed of the move. Traders who had built short exposure into the March and April weakness were forced to buy back positions as Bitcoin broke higher. The buying added fuel to the rally, pushing the price quickly toward $79,000.
Alphractal data had flagged the same pressure before the move. Bitcoin perpetual futures funding had stayed negative on a 30-day average basis for 46 straight days, while open interest rose about 12% over that period.
This negative funding means bearish traders were paying to keep positions open, a crowded setup that can unravel quickly when the price turns.
The squeeze gave Bitcoin momentum, though it also raised the bar for follow-through. A derivatives-led rally can extend if spot buyers step in after the breakout. Without that confirmation, the move can fade once forced buying slows.
Options market stays cautious
Meanwhile, options traders are giving Bitcoin room to rise without showing the kind of aggressive upside chasing that often marks overheated conditions.
Greeks.live data showed that 109,000 Bitcoin options expired Friday with a put-call ratio of 0.93, a max pain level of $72,000, and a notional value of $8.55 billion.
The firm said 25% of open options were set to expire in the monthly settlement, with 12% of open interest maturing at the end of May and 24% at the end of June.
Bitcoin’s implied volatility has continued to fall across major maturities, with several tenors slipping by 1 to 2 percentage points and moving below 40%. Skew metrics have also pulled back, signaling that the rebound has not been dominated by panic buying of upside exposure.
That leaves Bitcoin in a steadier position than the size of the short squeeze might suggest. Traders are not ignoring the rally, but they are not aggressively paying for calls.
Essentially, the options market is leaving space for a continuation while still pricing the risk that oil, the dollar and Fed expectations can interrupt the move.
However, Andre Dragosch, Bitwise Europe’s head of research, noted that several macro forces still favor Bitcoin. He pointed to fading recession risks, declining real interest rates if the Fed stays on hold while inflation rises, and a large gap between Bitcoin and global money supply trends.
In that framework, financial repression remains one of the strongest environments for the asset.
That view has gained traction as oil’s rally places the Fed in a narrower lane. If policymakers cut rates while energy prices remain elevated, real yields could fall, strengthening Bitcoin’s appeal.
On the other hand, if policymakers stay restrictive to contain inflation expectations, Bitcoin’s April rebound could face the same pressure that weighed on the asset earlier this year.
For now, traders are treating $78,000 as the first line of evidence. Holding that level through an oil spike, a firmer dollar, and weaker equities suggests demand has improved. However, a failed push through $80,000 would leave the move vulnerable to the same macro forces that drove previous pullbacks.