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U.S.-Iran talks fail, Bitcoin struggles to defend $70,000
A sustained rebound in crypto still looks elusive. On April 13, Bitcoin hovered near $71,000, down about 2.6% over the past 24 hours, while Ethereum slid 3.63% to around $2,200. Bitcoin's market share held at 58.8%, and overall sector trading volume showed little improvement.
Coinglass data put total liquidations over the past 24 hours at $284 million, including $203 million from long positions. The CoinMarketCap Fear & Greed Index stood at 43, signaling neutral sentiment.
Traditional markets also saw sharp swings. With tensions in the Middle East driving energy risk, oil prices stayed elevated and Brent briefly neared $107 a barrel, a steep jump from pre-conflict levels. In U.S. equities, the S&P 500 fell roughly 5% in March, marking one of its weaker monthly performances in recent years. Global stocks dropped further, pressured by higher energy import costs and a stronger U.S. dollar. Bond yields climbed, inflation expectations picked up again, and investors rotated aggressively between risk assets, boosting demand for classic safe havens such as gold. The moves underscore how cryptocurrencies, as high-beta risk assets, are absorbing both macro and geopolitical shocks.
U.S.-Iran negotiations break down
This week's soft tone in crypto has been closely tied to the rapid escalation in U.S.-Iran tensions. Face-to-face peace talks held in Islamabad, Pakistan, on April 11–12 ran for more than 20 hours and ended without a deal.
A U.S. delegation led by Vice President Vance failed to bridge core disputes with Iran, including Tehran's abandonment of a nuclear weapons program and the U.S. "red line" demand to halt uranium enrichment. Iran accused Washington of "maximumism" and "constantly shifting goals."
After the breakdown, U.S. President Trump said on social media on Sunday that U.S. forces would immediately begin a blockade of the Strait of Hormuz. U.S. Central Command (CENTCOM) later confirmed that, at 10:00 p.m. Beijing time on April 13, the blockade targets all vessels entering or exiting Iranian ports, while allowing normal passage to non-Iranian ports.
Iran's foreign minister and military responded with warnings that any military vessel approaching the strait would be treated as violating the ceasefire, and said Iran reserves the right to retaliate.
The Strait of Hormuz is a critical chokepoint for global oil flows, handling about 20% of the world's crude oil. A prolonged blockade could disrupt supply chains, lift oil prices further, intensify inflation concerns, and deepen fears of a global slowdown.
For risk assets, the impact is immediate: investors are pulling back from high-beta exposures and moving into cash or gold. Bitcoin's "digital gold" narrative is being muted by broader risk-off positioning, limiting its ability to hedge. In previous Middle East crises, crypto has often moved ahead of traditional markets with steep drawdowns—a pattern now repeating.
Polymarket currently prices a 27% chance that the United States and Iran will reach a permanent peace agreement by May 31, while the probability of an agreement before month-end has fallen to 14%.
Even so, the path forward remains uncertain. The Wall Street Journal reported that regional countries are working to bring the United States and Iran back to the table after the marathon Islamabad talks failed, and that diplomatic channels remain open with a second round potentially within days. Regional governments are also coordinating with Washington to help extend the fragile two-week ceasefire.
Fed policy adds another headwind
Monetary policy is another constraint on crypto. Minutes from the Federal Reserve's March meeting showed policymakers maintained expectations for only one rate cut in 2026, despite heightened uncertainty tied to the Iran conflict.
On April 10, U.S. CPI data showed March unadjusted year-over-year CPI rising to 3.3%, the highest since May 2024, matching market expectations and up from 2.40% previously. Seasonally adjusted month-over-month CPI came in at 0.9%, the highest since June 2022, also in line with forecasts.
The U.S. Bureau of Labor Statistics said record-high gasoline prices accounted for nearly three-quarters of the monthly CPI increase. Core CPI, which excludes food and energy, slowed to a 0.2% monthly gain.
Markets had hoped for a more aggressive easing cycle to support risk assets, but the oil shock has reinforced the Fed's cautious, data-dependent posture. Higher energy costs could slow the disinflation trend and push back the timeline for rate cuts—a negative backdrop for a liquidity-sensitive crypto market.
Polymarket data shows investors assigning a 26% probability to a single 25-basis-point Fed cut this year, while the probability of no change has climbed to 44%. Liquidity conditions are tightening, complicating a meaningful crypto rebound.
Profit-taking caps BTC's upside
On-chain indicators point to heavy supply overhead. Glassnode data suggests moves toward the $70,000–$80,000 zone are meeting thin liquidity and sustained profit-taking, limiting upside.
One recent push back above $70,000 faded as profit-taking exceeded $20 million per hour. Some sellers appear to be treating the rebound as temporary rather than a trend reversal.
With BTC around $70,800, roughly 13.5 million addresses are currently underwater, indicating a large cohort bought above the present spot price.
What to watch next
Despite near-term pressure, veteran industry figures remain structurally constructive. Strategy founder Michael Saylor said Bitcoin likely formed a bottom near $60,000 in early February as forced sellers were cleared out, arguing the low was driven more by seller exhaustion than valuation. He said selling pressure may be limited as ETF inflows absorb daily supply and corporate treasury allocations provide steady demand.
Saylor also argued the next major bull-market catalyst could be the development of a banking and digital credit system built on Bitcoin, turning it from a non-yielding asset into a broader capital-markets engine.
BitMEX founder Arthur Hayes wrote in late March that there is "a lot of fantasy" embedded in bullish expectations, adding that while he hopes "the bloodshed ends," he would not be buying risk assets at current levels.
Fundstrat's Tom Lee said there are growing signs a bottom may be forming, even as sentiment remains broadly skeptical, and suggested investors still uncertain should consider assets that historically performed best during the U.S.-Iran war.