Bitcoin recovery rally fades as liquidations and macro risks return

Bitcoin’s push toward $73,000 has lost traction, leaving the market exposed to renewed downside risks as macro uncertainty returned.

The flagship cryptocurrency climbed to a weekly high of $72,698 on Tuesday, gaining nearly 6% in under four hours as global markets responded to news of a two-week ceasefire agreement between the United States and Iran. 

Bitcoin rose as risk sentiment improved, as expectations that the Strait of Hormuz could reopen helped ease supply concerns.

However, the short period of euphoria faded quickly near the $72,000 level. A wave of liquidations hit derivatives markets at that point. More than $150 million in long positions were wiped out, confirming that bullish conviction remains weak at higher levels.

Price action also continued to track movements in traditional markets, with Bitcoin showing a tight correlation to S&P 500 futures during the rally. The link points to a market still heavily influenced by macro headlines rather than internal crypto-specific drivers.

Now, tensions surrounding the ceasefire have since raised fresh concerns. US Vice President JD Vance described the agreement as a “fragile truce,” while developments on the ground painted a less stable picture. 

Reports from the Levant indicated repeated violations, with Israel launching “Operation Eternal Darkness” targeting underground infrastructure tied to Hezbollah in Lebanon.

Israeli officials maintained that their operations fall outside the scope of the Iran ceasefire, citing strategic independence.

Further strain came after Iran’s parliamentary speaker accused Washington of violating “the spirit of the roadmap,” warning that Tehran could resume strikes if attacks on its allies continue. 

Any breakdown in the agreement risks reigniting conflict, a scenario that could weigh heavily on risk assets, including cryptocurrencies.

Market positioning remains sensitive to these developments. Bitcoin has struggled to secure a firm hold above $70,000 over the past week, and a sustained move below that level could open the door for a retest of the $64,000 support zone.

At last check, Bitcoin was trading just above $71,000, down less than 1% over the past 24 hours, as traders weighed the combined impact of geopolitical instability and shifting policy expectations.

Attention has also turned to monetary policy signals. Minutes from the Federal Reserve’s March 17–18 meeting showed that officials voted 11–1 to keep rates unchanged at 3.5% to 3.75%, while leaving the door open for potential cuts later this year.

The details of the discussion, however, pointed to caution. Policymakers signaled that any move toward easing would depend on inflation staying contained, particularly as energy prices remain a concern. Some members indicated that a tighter policy could still be required if price pressures persist.

Interest rate expectations continue to play a key role in crypto market sentiment. While lower rates tend to support risk assets, uncertainty around the timing of cuts can dampen demand and increase volatility.

Despite all the negative geopolitical headwinds, Bitcoin price could find some support and potentially decouple from traditional risk-off sentiment if reports of Iran circumventing traditional financial sanctions by using Bitcoin to facilitate trade at the Strait of Hormuz are confirmed.

On April 8, several regional maritime intelligence outlets reported that the Iranian Revolutionary Guard Corps (IRGC) was charging transit fees for commercial vessels with the option for direct payment in Bitcoin. If this is confirmed, it could help keep momentum afloat by providing a fundamental floor of demand in the short-term.