Why is Bitcoin Falling Today? Hormuz Strait Reopening Delays Pressure BTC Toward $70,000

TradingKey - Middle East tensions escalate ahead of negotiations, causing Bitcoin to pull back after a surge, with $70,000 becoming the watershed between bulls and bears.

On April 9, unexpected developments on the eve of US-Iran negotiations caused geopolitical tensions to rise again, leading to Bitcoin ( BTC) prices surging and then retreating. This morning, Bitcoin prices pulled back toward the $70,000 level, hitting a low of $70,528 and giving back some of its earlier gains.

Reportedly, three key clauses among the ten ceasefire terms proposed by Iran have been violated, including the Lebanon ceasefire, drone violations of Iranian airspace, and the denial of Iran's right to uranium enrichment. A White House spokesperson confirmed today that the U.S. cannot accept Iran's precondition for the immediate and permanent lifting of energy sanctions. Meanwhile, U.S. Vice President Vance, during a visit to Hungary, stated that the U.S. never promised the ceasefire agreement would include Lebanon, emphasizing that Israel is willing to exercise restraint there.

In response to the developments on the eve of negotiations, Iranian state media reported that if sanctions are not eased, the country will re-evaluate its open-door policy for the strait. Following Israel's strike on Lebanon, Iran halted tanker traffic in the Strait of Hormuz, forcing the tanker "AUROURA," which was originally heading toward the exit of the strait, to turn back.

Renewed uncertainty in the Middle East has caused the previously exuberant market to cool rapidly, with a sharp decline in risk appetite stalling Bitcoin's upward momentum. On Wednesday, bolstered by ceasefire hopes, Bitcoin prices surged toward $73,000, briefly breaking above the middle band of its range, but are now facing resistance at that level.

Bitcoin price chart, Source: TradingView

The market is currently divided; some investors believe geopolitical risks should bolster Bitcoin's value as "digital gold," while others are exiting risky assets due to fears that an escalation of war could trigger a liquidity crunch. Moving forward, the focus should be on the $70,000 level, which serves not only as a psychological barrier but also as the bull-bear watershed for this rally. If this level fails to hold, Bitcoin could further retreat to the $66,000 support zone.

On the news front, the focus remains on the upcoming negotiations, which will determine the final outcome. Currently, Iran is questioning the utility of the talks. Mohammad Bagher Ghalibaf, Speaker of the Iranian Parliament, stated, "The fundamental framework for negotiations was flagrantly violated before the Iran-U.S. talks even began. Under these circumstances, neither a ceasefire nor negotiations make any sense." Although expectations for these talks are low, neither side has publicly refused to attend.

In addition to geopolitical tensions, the market is holding its breath for the U.S. Senate's progress on the "CLARITY Act" next Monday (April 13). If there is a substantive breakthrough in this regulatory bill, it could offset some of the geopolitical headwinds and drive Bitcoin to resume its offensive. Conversely, if both geopolitical stability and regulatory expectations suffer setbacks, the crypto market could face a sharp correction in mid-April, potentially sending Bitcoin below the $60,000 mark.