Bitcoin declined sharply on Monday, slipping by 3% to $62,009, as global investors reacted to increasing tensions between the United States and Iran over the Strait of Hormuz. The move came amid new geopolitical developments and corresponding market volatility, which saw major digital assets approach their lowest levels for the year.
Escalating tensions around the Strait of Hormuz
The latest drop in Bitcoin’s price followed Iran’s closure of the critical shipping route, the Strait of Hormuz, a waterway responsible for moving a significant share of global oil shipments. U.S. officials responded with military action, and President Donald Trump soon declared that the United States would take operational control of the strait.
Trump announced that every vessel passing through the Strait of Hormuz would be subject to a 20% service fee, stating in a post, “The U.S.A. will be known as ‘THE GUARDIAN OF THE HORMUZ STRAIT,’” adding that transiting ships would now pay additional charges.
The U.S.A. will be known as ‘THE GUARDIAN OF THE HORMUZ STRAIT,’ and every vessel passing through is subject to a 20% service fee.
This decision provoked a sharp market response, especially in energy commodities. Crude oil prices surged over 9% on Monday, reviving inflation concerns and raising expectations that the Federal Reserve could consider more aggressive monetary policies. The renewed inflation risk made many investors less willing to hold riskier assets, including Bitcoin and other cryptocurrencies.
Market reaction and short-selling pressure
The rapid selloff in crypto markets was accompanied by a clear increase in short positions against Bitcoin. Market intelligence firm JDK Analysis reported “massive shorting” around a critical volume-weighted average price (mVWAP) threshold as the price declined during the pre-New York trading session. The analysis noted that BTC’s price at this level remained technically weak unless supported by renewed spot demand.
With spot also selling, this still looks very weak, but if New York brings real spot demand and mVWAP holds, a bounce could trap a large number of sellers.
Other observers commented on a spike in open interest, suggesting traders were increasingly betting against further price increases. In parallel, data from research platform SoSoValue revealed that Bitcoin-based exchange-traded funds saw eight consecutive weeks of capital outflows, indicating declining institutional appetite for the leading cryptocurrency.
Technical outlook and whale accumulation
Market analyst Ash Crypto reported that Bitcoin closed its weekly candle above the 200-day moving average, forming a doji candle—a pattern associated with market indecision. He highlighted $58,000 as a critical support level, warning that a close below this level could lead to a further decline toward the $49,000 zone. Alternatively, sustained support above $58,000 could set the stage for a move to $67,000 and possibly $83,000. Ash Crypto also pointed to the upcoming release of the U.S. Consumer Price Index as a potential market catalyst.
Blockchain analytics firm Santiment noted that wallet addresses holding between 10 and 10,000 BTC purchased approximately 11,000 BTC over the past week. This accumulation pattern by so-called “whales” has historically shown a strong correlation with future price movements, suggesting that larger holders anticipate a potential rebound.
Mini dictionary: Santiment, a blockchain analytics company, monitors on-chain data such as wallet holdings and transaction patterns to help assess market sentiment and detect large investor activity.
Trader Roman maintained a bullish stance despite recent market weakness, citing technical indicators like the Relative Strength Index and current trading volumes that point toward “downside exhaustion” and potential for a reversal towards the $70,000–$75,000 range.
| Event | Impact on BTC | Market movement |
|---|---|---|
| Strait of Hormuz closure | Increased downside pressure | BTC drops to $62,009 |
| Trump announces 20% vessel fee | Sharp risk-off shift | Oil rises 9%, crypto selling accelerates |
| Whales accumulate 11,000 BTC | Signals bullish long-term sentiment | Possible support near $58K |
By late evening, Bitcoin was trading near $62,815 as the market continued to weigh geopolitical risks and technical factors.
