Bitcoin drops as US-Iran talks collapse and Oil jumps above $100

Make CryptoSlate preferred on

Bitcoin fell during Asian trading hours after a weekend diplomatic push between Washington and Tehran broke down and a new US maritime order raised fresh concern over energy flows from the Middle East.

This pulled the top crypto lower alongside equities, reinforcing the market’s sensitivity to oil, inflation, and broader risk sentiment.

According to CryptoSlate’s data, the largest digital asset dropped from a weekend high near $74,000 to an intraday low of $70,570 after Vice President JD Vance said the negotiations in Islamabad had ended without an agreement.

As of press time, Bitcoin has slightly recovered to $70,877, leaving it sharply below levels reached after last week’s ceasefire announcement briefly lifted risk assets.

Meanwhile, this slide extended across other major digital assets, with Ethereum, XRP, and Solana all declining by more than 3% during the reporting period.

The move echoed a broader retreat in traditional markets as investors reassessed the odds of a near-term de-escalation in a conflict that has already shaken shipping routes, crude markets, and global expectations for growth and inflation.

By Monday morning, that pressure was visible well beyond crypto. The Kobeissi Letter said the S&P 500 and Dow Jones Industrial Average were each down about 1%, while the Nasdaq 100 fell 1.3%.

At the same time, oil prices surged as traders responded to the renewed prospect of prolonged disruption around one of the world’s most critical energy corridors.

Notably, this reversal followed a week in which risk assets had rallied on hopes that President Donald Trump’s two-week ceasefire plan could create room for a broader settlement.

That optimism began to unwind over the weekend as negotiators failed to bridge differences after nearly a full day of talks. Vance said Iranian officials were unwilling to accept U.S. terms, while Iran’s state media blamed what it described as unreasonable American demands.

The ceasefire remains in place until April 22, but the collapse of the talks left markets confronting the possibility that the pause could expire without a path to a more durable agreement.

A narrower US blockade still rattles markets

Selling intensified after the US Central Command said it would begin enforcing a blockade on all maritime traffic entering and exiting Iranian ports at 10 a.m. Eastern time on April 13, acting under a presidential proclamation.

The directive applies to vessels of any flag or ownership operating in Iranian coastal waters, including ports in the Arabian Gulf and the Gulf of Oman.

At the same time, CENTCOM said the move would not interfere with freedom of navigation for vessels transiting the Strait of Hormuz to or from non-Iranian ports, a distinction aimed at preventing a full disruption of global energy trade.

Commercial mariners were told to monitor maritime broadcasts and remain in contact with US naval forces. Additional guidance was set to be issued through formal notice-to-mariners channels before enforcement began.

Even with that narrower scope, traders treated the announcement as a major escalation in maritime pressure on Iran.

Data from oilprices.com showed that Brent crude rose more than 8% to top $103 a barrel, crossing back above the $100 level after dipping below $92 last week when ceasefire hopes returned. US oil prices officially jumped 10% at the open, rising above $105 a barrel.

The speed of that move reflected how fragile energy markets had become after weeks of war and disruption.

The Strait of Hormuz remains one of the world’s most important oil and gas chokepoints, carrying about one-fifth of global supplies. Since the US-Iran war began, traffic through the waterway has been reduced sharply.

That backdrop left Bitcoin exposed to a familiar macro chain reaction. Higher oil prices increase concern that inflation could remain sticky, which in turn threatens a longer period of tight financial conditions.

For a market that had just rallied on hopes of de-escalation, the failure of diplomacy and the return of crude above $100 forced a rapid repricing.

Bitcoin trades like a macro asset as liquidity thins

The magnitude of Monday’s drop also reflected a market structure that had become fragile well before the weekend talks collapsed.

Glassnode data showed that with Bitcoin near $70,800, the number of addresses in loss stood at about 13.5 million, indicating that a meaningful share of holders acquired coins above current levels.

That leaves a large cohort in drawdown and raises the odds that any rebound toward prior entry points will run into selling pressure.

The firm also said the $70,000 to $80,000 range has been marked by thin liquidity and repeated profit-taking, conditions that have capped recent bounces. One move back above $70,000 was exhausted by more than $20 million in profit realization per hour, underscoring how quickly supply has emerged as a strength.

Meanwhile, Joao Wedson, chief executive of Alphractal, pointed out that bearish traders had turned aggressive in the short term and built high leverage after a liquidity sweep above $73,000.

He said liquidity remains above $75,000, though the broader market structure has not shifted decisively. According to him, long traders remain the dominant side exposed to future liquidations, and the current phase still resembles an extended consolidation within a broader downtrend.

This is corroborated by CryptoQuant data, which noted that nearly $1 billion in sell volume hit Binance derivatives within an hour after the failed talks reinforced the market downside momentum.

According to the blockchain firm, BTC funding rates remained negative at around-0.0065%, a sign that short positions had come to dominate very short-term positioning. Historically, crowded short positioning can create the conditions for a squeeze, though those reversals tend to be smaller and shorter in bear markets.

That helps explain why Monday’s move did not look like a simple flight from crypto alone. Bitcoin increasingly trades as a liquidity-sensitive macro asset, responding to shifts in oil prices, interest rates, geopolitics, and broad investor appetite for risk.

As hopes of a ceasefire were building, crypto bounced quickly. However, when those hopes faded, the market gave back ground just as quickly.

Institutional demand through Bitcoin ETFs offers support beneath the sell-off

Even as headline risk weighed on prices, one part of the market continued to show signs of resilience.

Rachael Lucas, a crypto analyst at BTC Markets, pointed out that the institutional backdrop remained constructive after US-listed Bitcoin exchange-traded funds posted their strongest weekly inflows since February.

According to her, those products took in $786 million in the week ended April 10, with BlackRock’s iShares Bitcoin Trust accounting for $612 million of that total. Morgan Stanley’s newly launched MSBT fund added $46 million in its first three trading days, a notable start for a product carrying a 0.14% fee and backed by the distribution network of 16,000 financial advisers.

 

That demand matters because it offers a source of absorption when older holders use rallies to cut exposure. In recent weeks, the market has struggled to sustain upside through the $70,000 to $80,000 band, where thin liquidity has combined with profit-taking and uncertainty over macro conditions. Continued ETF inflows could help offset some of that pressure if geopolitical tensions stop worsening.

Analysts at BIT Official, the crypto financial services firm formerly known as Matrixport, noted that:

“What makes this particularly notable is the parallel to 2025, when year-to-date ETF flows were similarly flat at this stage, only to be followed by a surge of nearly $30 billion in inflows. That wave of capital ultimately fueled the powerful post-April tariff policy rally, which extended through October. Viewed through this lens, the recent stabilization suggests that Bitcoin may have already absorbed the bulk of the selling pressure from January and February, with March marking the first return to positive inflows since the October correction.”

Additionally, CryptoQuant data indicate that Bitcoin is currently undervalued, noting that the top crypto has fallen below the 20th quantile of its power-law model.

The firm put the reading at 18.5%, indicating Bitcoin has spent only 18.5% of its history at similar valuation levels relative to that framework.

That signal is longer term and offers little protection against sudden macro shocks, but it does suggest that a deep downside is unfolding in a market already trading well below previous extremes.

Oil, inflation, and flows now shape the next move

Timothy Misir, head of research at BRN, told CryptoSlate that the market is entering the new week facing two competing forces: improving capital flows into Bitcoin investment products and rising macro risk linked to the Middle East.

He pointed to three drivers likely to set the tone over the coming sessions. The first is the conflict’s trajectory itself. Any further disruption in or around the Strait of Hormuz would raise energy prices again and amplify volatility across asset classes.

The second is inflation data and Federal Reserve communication, both of which will shape whether traders begin to price a longer period of restrictive policy. The third is whether ETF inflows can continue strongly enough to absorb selling pressure within a range where holders have repeatedly taken profits.

Bitcoin, he said, is approaching an important test inside the $70,000 to $80,000 zone. Stability above $70,000 leaves room for faster upside movement, while a failure to hold there would reinforce the current range and extend the consolidation phase. Any durable move higher would likely require both sustained ETF buying and reduced profit-taking from holders looking to exit on strength.

On the other hand, Lucas said Bitcoin was testing support in the $70,500 to $71,000 range. She stated that holding that zone would leave room for a move back toward $72,000 to $73,000, while a stronger reclaim supported by sustained ETF demand would improve the near-term picture.

For now, the Bitcoin price is being driven by a geopolitical shift that quickly spilled into oil and then into every major risk asset.