Stopping Short of $80,000. U.S.-Iran Tensions Rise, Is Bitcoin a "Halftime Break" or "Official End"?

TradingKey - The US-Iran conflict has escalated further, causing Bitcoin prices to retreat after a surge; whether it can break through $80,000 depends on the new round of negotiations this Tuesday.

On April 20, escalating tensions between the U.S. and Iran led to a further pullback in Bitcoin ( BTC) prices, which fell below the $75,000 threshold. Today, Bitcoin's price dropped nearly 1.4%, currently trading at $74,386. Last Friday, the price of Bitcoin surged past $78,000, hitting its highest level since February 2 of this year, but failed to breach the $80,000 psychological barrier.

Bitcoin price chart, source: TradingView

On Saturday, the Strait of Hormuz was closed once again. The resurgence of the US-Iran conflict triggered a reversal in Bitcoin prices after an initial rally. On the evening of April 18 local time, the Navy of the Islamic Revolutionary Guard Corps (IRGC) announced the closure of the Strait of Hormuz, citing the continued U.S. blockade of Iranian vessels and ports in violation of previous ceasefire agreements.

On Sunday, the U.S. attacked an Iranian cargo ship, prompting a counterattack from Iran. This deterioration in the US-Iran conflict led to further selling pressure on Bitcoin. A spokesperson for the Khatam al-Anbiya Central Headquarters of the Iranian Armed Forces stated, "U.S. forces attacked an Iranian container ship in the Gulf of Oman on the 19th; the Iranian Armed Forces subsequently launched multiple drones to strike several U.S. warships."

Currently, Iran retains control of the Strait of Hormuz and asserts it will not relinquish its authority. Ebrahim Azizi, a former IRGC commander and Chairman of the National Security and Foreign Policy Committee of the Iranian Parliament, stated, "Iran will absolutely not give up control of the Strait of Hormuz."

Furthermore, the previously negotiated two-week ceasefire agreement is set to expire on April 22. Significant disagreements remain between the two sides regarding control of the Strait of Hormuz and terms for lifting sanctions. The immense uncertainty surrounding the new round of negotiations continues to weigh on Bitcoin prices.

According to AXIOS, U.S. officials revealed that Vice President Vance will lead a negotiating team to Islamabad, hoping to hold a new round of talks with Iran before the ceasefire expires on Tuesday night to reach an agreement or extend the truce. However, the Islamic Republic News Agency (IRNA) reported on the 19th that Iran has refused to engage in a second round of negotiations with the United States.

If the second round of US-Iran negotiations succeeds, Bitcoin is expected to swiftly break the $80,000 mark, driven by "risk-on" sentiment and short-term short covering. Conversely, if negotiations collapse, it could trigger an escalation of the conflict and eliminate prospects for future talks, plunging the market into panic and potentially sending Bitcoin back down to $65,000.