Bitcoin (BTC) fell 3% to trade below $71,000 at Sunday’s weekly close after negotiations to end the war between the United States and Iran failed.
Key points:
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Bitcoin lost its gains as negotiations between the United States and Iran failed.
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The Strait of Hormuz became a hot spot again after US President Donald Trump demanded its reopening.
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BTC price decline punishes late long positions.
BTC Price Drops Amid US-Iran War Fears
Data from TradingView showed that BTC prices fell below $71,000 after news of a sudden breakdown in negotiations between the United States and Iran in Islamabad, Pakistan.
The failure to reach agreement on the issue of nuclear weapons led both delegations to leave negotiations unfinished. Later, US President Donald Trump said the US would block the Strait of Hormuz and “deny” ships paying Iran for safe passage.
“No one who pays an illegal toll will be able to travel safely on the high seas,” he wrote in an article on Social truth.
A follow-up article repeated demands that Iran make Hormuz, a major oil transit route, fully operational.
Before the futures markets opened, reactions to the latest events highlighted the risks to the economy as a whole.
“If the path forward is continued war, escalation and prolonged closure of the Strait of Hormuz, then the war in Iran has entered a new era,” the Kobeissi Letter wrote in its statement. last analysis on X.
“US CPI inflation just rose from 2.4% to 3.3% and a further escalation of the war in Iran would lead to inflation above 4.0%, according to our models. »
Kobeissi discussed consumer price index (CPI) inflation in the United States, an indicator particularly sensitive to oil prices. Earlier this week, the March CPI reading came in slightly below expectations, despite the the largest increase in its oil price component in 60 years.
“There are currently no plans for additional talks, according to Iranian media,” Kobeissi added.
“So, will Trump choose to step up his diplomatic efforts or double down on his military action? Today we find out.”
Bitcoin Liquidations Rise as Longs Suffer
As the only asset class traded 24 hours a day, Bitcoin and crypto were the only ones to react to the chaos in real time.
Related: Bitcoin Analysis Sees $55,000 BTC Price at “Iron Bottom” by December 2026
Data from CoinGlass showed BTC/USD going through lengthy liquidations, with the liquidation total over the past 24 hours approaching $350 million.
“Volatility remains high and it is clear that there will be no path forward where risky assets do well if this continues to be the consensus,” trader Michaël Van de Poppe wrote in a statement. Answer X.
Van de Poppe suggested that economic weakness resulting from the return of war could force the Federal Reserve to inject liquidity despite rising inflation.
“On a larger scale, I think we are in a weak enough economy right now that the FED has no choice but to start printing again to positively influence the economy,” he argued.
Earlier, Cointelegraph reported on the increasing likelihood that the United States will enter a recession in 2026.
Next week, the March Producer Price Index (PPI) will provide more evidence of inflation, while several senior Fed officials will speak on the economy.
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