Bitcoin declined approximately 3% to trade below $71,000 following a breakdown in negotiations between the US and Iran. The heightened geopolitical tensions centered on the Strait of Hormuz, a critical oil transit route. Market data showed nearly $350 million in long liquidations over 24 hours as the crypto market reacted in real time to the developments, which analysts warned could push US inflation higher.
Bitcoin traded below $71,000 after talks between the US and Iran ended without an agreement. The subsequent price drop punished late long positions in the market.
US President Donald Trump stated the US would blockade the Strait of Hormuz and interdict vessels paying Iran for passage. “No one who pays an illegal toll will have safe passage on the high seas,” he wrote on Truth Social.
Analysts warned that prolonged conflict could significantly impact inflation. “US CPI inflation just jumped from 2.4% to 3.3% and further escalation of the Iran War would lead to 4.0%+ inflation, according to our models,” The Kobeissi Letter stated in its analysis.
Data from CoinGlass showed total crypto liquidations nearing $350 million in 24 hours. Bitcoin’s status as a 24-hour traded asset meant it reacted to the news in real time.
Trader Michaël Van de Poppe suggested the Federal Reserve might be forced to act. “On a larger scale, I think that we’re currently in a sufficiently weak economy and the FED has no other option than to start printing again,” he wrote in a response. The coming week will bring more inflation data with the March Producer Price Index.
