The biggest short squeeze of 2026 lasted about one day. On Friday April 17, Bitcoin surged to $78,000 after Iran’s foreign minister declared the Strait of Hormuz fully open to all commercial shipping. Oil crashed nearly 10%. Equities hit record highs. Crypto bears were obliterated. By Saturday, it was over. Iran closed the strait again, tankers turned around, and Bitcoin pulled back to $76,000.
One of the biggest short squeezes of 2026 came and went in a single session. Bitcoin climbed to $78,000 late Friday, triggering $762 million in liquidations across 168,336 traders with $593 million of that on the short side, per CoinGlass.
The speed and violence of the round-trip is a reminder that in this market, geopolitical headlines giveth and geopolitical headlines taketh away.
What Happened on Friday
Iran’s Foreign Minister Abbas Araghchi declared the Strait of Hormuz “completely open” to all commercial vessels for the remaining period of the ceasefire. President Trump amplified the announcement and then told reporters that Iran had agreed to an “unlimited” suspension of its nuclear programme, though Tehran never confirmed the claim.
The market response was immediate. Oil crashed nearly 10% to $85.90 per barrel, its lowest level since the war began. The Nasdaq hit a fresh record. Bitcoin broke through $76,000, then $77,000, then $78,000, clearing a resistance zone that had rejected it four times since February. Funding rates on Bitcoin perpetuals had been negative for 46 consecutive days, meaning the market was crowded short. The Hormuz headline was the spark that forced those shorts to cover all at once.
Spot Bitcoin ETFs pulled in nearly $1 billion in weekly inflows, their best week since January. Friday alone brought in $663.9 million, the biggest single-day total of the week. Total net assets across all spot Bitcoin ETFs climbed above $101 billion.
What Happened on Saturday
By Saturday evening hours in Asia, Bitcoin had pulled back to $76,091, up just 0.8% on the day, as Iran broadcast that the Strait of Hormuz was closed to maritime traffic again less than 24 hours after its foreign minister declared it fully open. Two tanker owners told Bloomberg their vessels received Iranian radio transmissions shutting the waterway, with one supertanker reporting gunfire and aborting transit.
State news agency Nour said Hormuz had returned to “strict management and control by the armed forces” in response to a US blockade of Iranian shipping. Several oil tankers that had raced toward the strait Friday on the initial reopening news turned back.
Iran’s stated reason for the reversal was that the US naval blockade of Iranian ports remained in place. From Tehran’s perspective, opening the strait while the US continued blocking Iranian shipping was a one-sided concession. The White House maintained that the blockade would stay until a comprehensive deal was completed. The result was a whipsaw that left traders on both sides nursing losses.
Brent crude rebounded toward $94 to $96 per barrel after dropping 9% on April 17, whipsawing oil futures markets. Bitcoin pulled back to the $75,800 to $77,100 range after briefly clearing $78,000.
The Pattern Is Now Familiar
This is the third time in April that a geopolitical headline has driven a sharp crypto move that reversed within days. The ceasefire announcement on April 7 pushed Bitcoin from $71,000 to $73,000 before the Islamabad talks collapsed on April 12 and sent it back to $70,600. The Hormuz reopening on April 17 pushed it to $78,000 before the closure on April 18 brought it back to $76,000.
The market pattern is now familiar: ceasefire headlines drive a rally but a reversal headline arrives before the breakout can consolidate.
Each cycle produces a short squeeze, a burst of ETF inflows, and a rush of optimism that fades before the weekend is over. The longs who bought the peace headline get trapped, the shorts who were squeezed reload, and the range reasserts itself.
What Held Up
Despite the reversal, the damage was not as bad as previous pullbacks. Bitcoin is still up roughly 4.7% on the week. Ether held up better than Bitcoin on the retreat, down just 0.2% over 24 hours while Solana dropped 1.3% and Dogecoin fell 2.1%. On a weekly basis, XRP leads at 6.4%, BNB added 4.6%, and Ether rose 5.2%.
Morgan Stanley launched a Bitcoin Trust fund, which already holds $120 million in assets after just six trading days. Institutional infrastructure continues to build even when the price whipsaws. The ETF inflows, the Morgan Stanley trust, and Strategy’s continued accumulation all represent structural demand that does not disappear because Iran changed its mind about a shipping lane.
What Comes Next
The ceasefire expires on April 22. That is three days away. No formal talks are scheduled. Pakistan continues to act as an intermediary, but the demands from both sides remain far apart. The FOMC meets on April 28 and 29. Whether $76,000 holds into Monday’s open is the immediate question for traders. Whether the ceasefire extends or collapses is the question that determines the rest of April.
