Bitcoin briefly climbed to $78,100 on Friday, its highest level in more than two months, after U.S. President Donald Trump said the Strait of Hormuz was “open and ready for business.” The move followed comments from Iran’s foreign minister Abbas Araghchi that commercial shipping had resumed under a ceasefire.
By mid-morning, bitcoin had eased to around $77,700, but the rally helped push total cryptocurrency market capitalization above $2.7 trillion.
Wider crypto and market reaction
Major tokens advanced alongside bitcoin. Ethereum, XRP and Dogecoin each gained more than 5% over the past 24 hours.
Traditional markets also showed strength. The S&P 500 index approached 7,125, while oil futures fell sharply, sliding from roughly $91 per barrel on Thursday to below $81 on Friday, easing pressure on inflation expectations.
Geopolitics and the strait of Hormuz
The reopening of the key shipping lane follows a ten-day truce between U.S. and Iranian forces. Trump said a U.S. naval blockade on Iran would remain in place, raising questions about how smoothly traffic can flow through the waterway.
In an additional online statement, he said Tehran had agreed not to close the strait again, a pledge that, if maintained, could reduce the risk of further energy and shipping disruptions.
Trading targets and sentiment
Market observers framed the move as evidence of improving risk appetite. Some pointed to a potential trading band of $80,000 to $85,000 for bitcoin if momentum holds.
Data from prediction platform Polymarket reflected the shift in sentiment. The implied probability of bitcoin touching $80,000 this month nearly doubled within hours, rising from 35% to 68%.
Derivatives show leverage and caution
Despite the price jump, derivatives indicators point to a cautious backdrop. Analysts noted that demand growth has not fully kept pace with the rally, and many see the $78,000 zone as near-term resistance. Further gains may hinge on stronger spot activity and a supportive macro environment.
Futures data underline the buildup in leveraged positioning. Total open interest in bitcoin futures has climbed to $25.25 billion, a level suggesting heavy use of leverage behind the recent advance. Such concentration raises the risk of forced liquidations if prices reverse suddenly.
On-chain flows hint at profit-taking
On-chain metrics suggest some longer-term holders may be using higher prices to reduce exposure. Net flows of bitcoin to centralized exchanges have been slightly positive over the last 48 hours, a pattern often associated with profit-taking or exit positioning during rallies.
Options market skew favors protection
Options pricing also leans toward caution. The one-month 25-delta skew remains in positive territory, indicating that demand for protective put options exceeds demand for bullish call options.
This configuration signals that more sophisticated market participants are prioritizing hedges against a possible downturn rather than positioning aggressively for a continued, uninterrupted surge.
Tight correlation with equities
Bitcoin’s recent behavior continues to track traditional equity markets closely. The 30-day correlation with the S&P 500 now stands at 0.74, indicating that both assets are moving in near lockstep.
This tight linkage suggests that broader macroeconomic factors, rather than crypto-specific developments, are driving the current rally.
Oil slide supports risk assets
A key component of the positive macro backdrop is the sharp decline in oil prices. The drop has softened fears of persistent inflation and the prospect of tighter monetary policy, easing concerns about higher interest rates and funding costs.
That relief is boosting assets typically seen as higher risk, including cryptocurrencies and equities, as traders respond to an improved liquidity and policy outlook.
As Bitcoin surges, sharpen your market timing with our guide to Crypto Fear and Greed Index strategies.
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