Bitcoin held near $78,000 on Friday as oil prices rose above $100 a barrel, testing whether the biggest digital asset can sustain its April rebound as the U.S.-Iran conflict puts energy markets on edge.
The move comes after President Donald Trump’s comments over the Strait of Hormuz escalated, saying the US Navy controls the waterway and no ships can enter or exit it without US approval.
The comments reinforced concerns that the conflict, which currently focuses on maritime impacts rather than direct attacks, could lead to a long-term shutdown of one of the world’s most vital energy routes.
Brent crude rose to about $107 a barrel, and West Texas Intermediate traded around $97. WTI was on pace to gain more than 17% for the week as stalled peace talks, tanker seizures and the continued blockade of Hormuz deepened supply concerns.
Bitcoin’s reaction was more cautious. The flagship digital asset briefly traded above $79,000 before rising to $78,300, extending April’s recovery by about 15%.
The gains came even as U.S. stocks fell, the dollar strengthened, and traders repriced the risk that higher oil prices could keep inflation high until the Federal Reserve’s next policy meeting.
This combination has made Bitcoin a cleaner test of market inflation trading. Traders are considering whether tokens could benefit from new demand for rare assets while avoiding the pressures that a strong dollar and rising real yields typically put on speculative markets.
Oil returns to the center of Bitcoin trading
The Strait of Hormuz has become a major conduit for the conflict between the United States and Iran to spill over into global markets.
Before the war, about 20 million barrels of oil and petroleum products moved through the waterway every day.
But shipping has since slowed sharply as Iran demands authority over the ship’s navigation and the United States blocks Iran’s maritime trade. The result was a physical disruption that was more important to traders than a formal ceasefire.
Trump ramped up the pressure on Thursday, saying on Truth Social that the United States has “full control” of the strait and will keep it “strictly closed” until Iran reaches a deal. He also ordered the navy to destroy Iranian ships laying mines in the waterway.
Oil traders were quick to price in the risk of prolonged disruption. Brent oil prices above $100, bringing back memories of earlier energy shocks that accelerated headline inflation and forced central banks to tighten policy for an extended period of time.
In the case of Bitcoin, that creates a complex backdrop.
Higher oil prices support the argument that investors should hold assets outside the fiat system, especially if inflation rises while central banks avoid further tightening. At the same time, an oil-induced inflation shock could push up the dollar, weigh on stock valuations and reduce the liquidity of risk assets overall.
The first version of this trade helped Bitcoin maintain its position on Friday. The second risk remains the primary risk for traders looking to break above $80,000.
Futures traders drive the move
The strongest part of Bitcoin’s rise in this market resilience was due to derivatives.
Bitcoin’s rise from $76,351 to $79,447 on Thursday was primarily driven by futures trading, according to CryptoQuant data.
The firm said open interest rose from about $24.88 billion to nearly $28 billion as prices rose, a pattern that suggests leveraged positioning rather than broad spot market bidding.
This rally forced a significant exit from bearish positions. Bitcoin short interest amounted to approximately $607.9 million, while Ethereum short interest amounted to approximately $581 million. Short-term liquidations for the two assets totaled nearly $1.19 billion.
The long liquidations were much smaller. Bitcoin long liquidation amount reached approximately $12.8 million, and Ether long liquidation amount reached approximately $98.5 million. The total amount of long-term liquidations amounted to approximately $111.4 million.
This imbalance explains the speed of movement. Traders who had built short exposure heading into the March and April downturn were forced to buy back their positions as Bitcoin rose. Buying fueled the rally, quickly pushing the price toward $79,000.
Al-Raraktar data showed similar pressures even before the move. Bitcoin perpetual futures funding has been negative for 46 consecutive days on a 30-day average basis, but open interest has increased by about 12% during that period.
This negative funding meant that bearish traders were paying to keep their positions open, creating a crowded setup that could quickly unwind if the price reversed.
This squeeze gave Bitcoin momentum, but it also raised the bar for follow-through. If spot buying steps in after a breakout, the derivatives-driven rally could extend. Without that confirmation, the move could disappear once the forced buying slows down.
Options market remains cautious
Option traders, on the other hand, are giving Bitcoin room to move higher without aggressively chasing the upside, which would indicate an overheated situation.
According to data from Greeks.live, 109,000 Bitcoin options expired on Friday, with a put-call ratio of 0.93, a maximum pain level of $72,000, and a notional amount of $8.55 billion.
The company said 25% of its open options mature with monthly settlements, while 12% of its open interest matures at the end of May and 24% at the end of June.
Bitcoin’s implied volatility continues to decline across major maturities, with some tenors dropping 1-2 percentage points to below 40%. Skew indicators have also receded, indicating that the rally is not dominated by panic buying aimed at the upside.
As a result, Bitcoin remains in a more stable position than the size of the short squeeze would suggest. Traders aren’t ignoring the rally, but they aren’t actively paying for the calls.
Fundamentally, the options market leaves room for continuation, but is still pricing in the risk that the move will be interrupted by oil, the dollar, and expectations from the Fed.
However, Andre Dragos, head of research at Bitwise Europe, pointed out that some macro forces still support Bitcoin. He pointed to waning recession risks, lower real interest rates if the Fed continues to hold policy while inflation rises, and a large gap between Bitcoin and global money supply trends.
In that framework, financial repression remains one of the most powerful environments for assets.
This view is gaining momentum as rising oil prices tighten the Fed’s profit margins. If policymakers cut interest rates while energy prices remain high, real yields could fall, making Bitcoin more attractive.
On the other hand, if policymakers continue to impose restrictions to rein in inflation expectations, Bitcoin’s April rally could face the same pressures that weighed on the asset earlier this year.
For now, traders are treating the $78,000 mark as the first line of evidence. Maintaining this level through soaring oil prices, a strong dollar, and falling stock prices suggests that demand is improving. However, a failure to break above $80,000 would leave the move vulnerable to the same macro forces that caused the previous decline.
