Bitcoin briefly touched $72,700 on Wednesday as traders rejoiced over a ceasefire agreement between the United States and Iran, but fell below $71,000 within hours as new violence in the Middle East dashed optimism.
The rise was real, but it didn’t last long enough to matter.
Hormuz remains hampered, and oil is bouncing back
Israel launched its largest attack on Lebanon to date, striking more than 100 Hezbollah positions across Beirut in less than ten minutes. The Iranian parliament speaker announced that three terms of the ceasefire had already been violated, sending West Texas Intermediate crude up 2.8% to $97.03 and Brent crude up 2.5% to $97.14 a barrel, reversing most of the previous session’s 16% decline.
The Strait of Hormuz, through which about 135 ships usually pass daily, Only three passes were recorded Wednesday. More than 800 ships remain stuck in the Gulf, awaiting clarity on safe passage.
Ethereum fell 1.1% to $2,185, tracking Bitcoin’s decline amid widespread weak risk appetite. Gold fell slightly to $4,713, while the dollar remained stable, indicating that markets were cautious but not in full panic mode.
Market analysts noted that the rally was largely driven by algorithmic strategies and momentum rather than a true fundamental improvement. The recovery lacked staying power once geopolitical pressures returned.
The Fed is adding another layer of pressure
Minutes of the US Federal Reserve’s March meetingThe report released on Wednesday showed growing concern among policymakers about persistent inflation. Some officials said the Fed should keep rate hikes on the table if oil prices remain high.
A prolonged blockade of Hormuz would keep energy costs high, delaying any Fed pivot that cryptocurrency markets were counting on. Historically high interest rates are weighing on risk assets like Bitcoin, making war uncertainty and a hawkish Fed a difficult combination for the bulls.
For Bitcoin, the macro backdrop remains uncomfortable – caught between fading hopes for a ceasefire and the Fed’s lack of rush to mitigate the crisis.
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