On the 6th of February, Bitcoin [BTC] dived to a low of $60k. The swift losses on the 5th of February had resulted in $1.84 billion in long liquidations. Market participants feared that the bear market would only worsen.
A perfect bearish storm appeared to be whipping up. In his State of the Union address on the 25th of February, President Donald Trump asserted that the U.S. economy was “roaring,” but also warned of possible military action against Iran.
On the 28th of February, the United States military commenced joint military action with Israel against Iran, leading to the Strait of Hormuz crisis. Closing this artery, which accounted for roughly 25% of the global seaborne oil traffic, has increased risks of inflation in the long term.
As the fog of war intensified in the past two months, it was, surprisingly, the Bitcoin bears who were disproportionately blindsided by the BTC price action.
Bitcoin has not reacted as participants expected
These conditions meant that, in early March, calls for new lows below $60k were popular. Instead of falling lower, Bitcoin bulls slowly but steadily drove an uptrend.
AMBCrypto had highlighted intense profit-taking activity and heightened speculative interest during the rally. The disbelief in the rally set up multiple short-squeeze days.
CoinGlass liquidation data revealed there had been six days since late February during which the short liquidations across the crypto market exceeded $400 million.
During the same period, crypto long liquidations reached the $390 million mark on two occasions but did not cross the $400 million threshold even once.
Examining the highest short liquidation days
The crypto market in the past two months has been heavily influenced by headlines ranging from U.S.-Iran tensions, Trump’s comments, oil prices, and even quantum fears.
Strong Bitcoin price moves tend to see aggressive altcoin moves as well. The bullish State of the Union address regarding the economy on the 25th of February saw Bitcoin rally from $64k to $70k, liquidating $588.6 million worth of short positions on the day.
On the 4th of March, there were $478.4 million in short liquidations as BTC decisively pierced the $70k psychological barrier. Sizeable spot ETF flows of $461 million signaled demand for BTC, driving prices higher.
Meanwhile, President Trump had told Congress that it was too early to be sure of the “full scope and duration” of the U.S. strikes on Iran. BTC’s momentum shifted, and it fell 7.9% over the next four days.
The 16th of March saw major short liquidations worth $416.62 million. Bitcoin was on the verge of challenging the $75k level, and institutions continued to buy the fear as negative Funding Rates helped fuel another short squeeze.
On that day, Iran launched a major aerial attack targeting Israel and various sites across the Gulf, as well as threatening U.S. interests in the region. BTC reacted once again, falling from $76k to $69k in three days.
In April, tensions between Iran and the United States appeared to cool. President Trump claimed a “total and complete victory” on the 7th of April after Iran had agreed to unblock the Strait for two weeks.
Bitcoin reacted immediately, using the $69k level as a launchpad to rally to $72k by the end of the day, resulting in $431 million in short liquidations.
Another round of short liquidations worth $426.84 million came on the 13th of April as the market increasingly priced in the peace narrative.
The 17th of April was the final day in these eventful weeks that faced hefty short liquidations. Iran announced the opening of the Strait of Hormuz as Israel agreed to a ceasefire in Lebanon. A total of $583.52 million in short liquidations came due to the ensuing rally.
The April uptrend extended to $79.4k by the 22nd of April and has receded to $75.6k at press time.
Crypto traders are lost at sea
Quantum FUD and threats to Bitcoin’s network security added to the perceived pressure on crypto.
A week ago, a BBC report examined trade volume data across several markets and found a suspicious pattern of some large traders making inordinate amounts of money right before President Trump’s headline-grabbing announcements.
Crypto traders have had to contend with market-shattering news and Trump’s Truth Social posts, late on Sunday or before Monday’s market open.
In late March, Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, tweeted that traders and investors can use U.S. political headlines as a “reverse indicator”.
A foreign statesman tweeting trading advice to handle Trump’s announcements amidst a global energy crisis might not have been on U.S. investors’ bingo cards for 2026.
All things considered, Bitcoin has reacted remarkably positively since the outbreak of aerial strikes and naval blockades.
The price structure was bearish in the higher timeframes, and the current move can still reach the $83k-$89k golden pocket before reversing.
It remains to be seen if the popular adage “Sell in May, walk away” comes true this summer.
Final Summary
- Bitcoin has had six days of high short liquidations since President Trump’s State of the Union address.
- The headline-driven market came alongside a suspicious pattern of what looked like insider trading before news announcements.