U.S.-Iran negotiations in Islamabad ended in failure, pushing Bitcoin toward a critical resistance level near $71,000. The talks collapsed after more than 20 hours, triggering a Trump-ordered blockade of the Strait of Hormuz. BTC fell 2.6% in 24 hours, with $284 million in liquidations reported. The U.S. CPI data at a 3.3% annual rate kept expectations for Fed rate cuts in check. Altcoins showed minimal movement amid low market volume.

A major rebound in the crypto market remains distant. On April 13, BTC price hovered around $71,000, falling approximately 2.6% over 24 hours, while ETH performed even weaker, dropping 3.63% to around $2,200. Bitcoin’s market share remains at 58.8%, and overall trading volume across the crypto sector has not significantly increased.

Coinglass data shows that the total liquidation amount across the network over the past 24 hours was $284 million, with long positions accounting for $203 million in liquidations. Meanwhile, the CoinMarketCap Fear & Greed Index is currently at 43, indicating neutral market sentiment.

Traditional financial markets have also experienced sharp volatility. Affected by the situation in the Middle East, international oil prices have remained elevated, with Brent crude briefly approaching $107 per barrel—a significant surge compared to pre-conflict levels. In the U.S. stock market, the S&P 500 fell approximately 5% in March, one of its weakest monthly performances in recent years. International equities, pressured by energy import costs and a stronger U.S. dollar, declined even further. Bond yields have risen, inflation expectations have reignited, and investors are rapidly shifting between risk assets, driving up demand for traditional safe-havens such as gold. This cross-market interconnectedness further confirms that cryptocurrencies, as high-beta risk assets, are simultaneously bearing the brunt of both macroeconomic and geopolitical pressures.

U.S.-Iran negotiations break down

One of the key drivers behind this week's sluggish crypto market has been the sharp escalation of tensions between the U.S. and Iran. The face-to-face peace talks between the U.S. and Iran, held in Islamabad, Pakistan, on April 11–12, lasted over 20 hours but ultimately ended in failure.

Vice President Vance led a U.S. delegation that failed to reach agreement with the Iranian delegation on core disagreements, including Iran’s abandonment of its nuclear weapons program and the "red line" of halting uranium enrichment. Iran accused the U.S. of "maximumism" and "constantly shifting goals."

After negotiations broke down, U.S. President Trump announced on social media on Sunday that U.S. forces would immediately initiate a blockade of the Strait of Hormuz. The 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, but will not impede normal passage to non-Iranian ports. Iran’s Foreign Minister and military swiftly responded, warning that any military vessel approaching the strait would be considered a violation of the ceasefire, and reserving the right to retaliate.

The Strait of Hormuz is a critical chokepoint for global oil transportation, handling about 20% of the world's crude oil. If a blockade persists, supply chain disruptions could directly push up oil prices, further fueling concerns about global inflation and expectations of economic slowdown.

This geopolitical black swan event has the most direct impact on risk assets: investors are rapidly withdrawing from high-beta assets and moving into cash or gold. BTC’s safe-haven屬性 as “digital gold” is temporarily suppressed by risk-off sentiment, preventing it from serving as a hedge. In past similar Middle East crises, crypto markets often reacted before traditional markets, experiencing sharp corrections—exactly the scenario we’re witnessing today.

Latest data from Polymarket shows that the probability of the United States and Iran reaching a permanent peace agreement by May 31 of this year is 27%, while the probability of reaching an agreement before the end of this month has dropped to 14%.

However, future U.S.-Iran negotiations still carry a degree of uncertainty.

According to The Wall Street Journal, officials familiar with the matter said that after marathon peace talks in Islamabad failed to produce an agreement, countries in the Middle East are racing to push the United States and Iran back to the negotiating table.

Despite strong statements from both the U.S. and Iran, diplomatic channels remain open, and a second round of talks could take place within days. Regional countries are coordinating with the U.S. to ensure the extension of the fragile, two-week ceasefire.

This year, the Federal Reserve may cut rates only once.

Another key壓制 factor comes from monetary policy. The Federal Reserve’s March meeting minutes showed that, despite heightened uncertainty from the Iran conflict, policymakers maintained their expectation of only one rate cut in 2026.

On April 10, the CPI data was released, showing that the U.S. March unadjusted year-over-year CPI rose to 3.3%, the highest level since May 2024, in line with market expectations of 3.3% and up from the prior value of 2.40%. The seasonally adjusted month-over-month CPI for March came in at 0.9%, the highest since June 2022, also matching market expectations. The U.S. Bureau of Labor Statistics noted that record-high gasoline prices accounted for nearly three-quarters of the monthly CPI increase. Another measure, excluding food and energy costs, saw its monthly gain slow to 0.2%.

Markets had initially hoped for a more aggressive easing cycle to boost risk assets, but the oil price shock has made the Fed’s “data-dependent” strategy more cautious. Higher energy costs could delay the path of inflation decline, thereby pushing back the timing of rate cuts.

This is undoubtedly a further blow to the cryptocurrency market, which is highly dependent on liquidity. Historically, the disappointment of interest rate cut expectations has often been accompanied by a repricing of risk assets; BTC’s current consolidation around $71,000 reflects this adjustment in macroeconomic expectations.

Current data on Polymarket shows that the market assigns only a 26% probability to the Fed cutting rates by 25 basis points once this year, while the probability of holding rates steady has risen to 44%.

Market liquidity is tightening, casting a shadow over the crypto market's rebound.

Profit-taking suppresses BTC price rebound

On-chain data indicators truly reflect the actual trading intentions of crypto participants. Glassnode data shows that any attempt to reach the $70,000 to $80,000 range faces insufficient liquidity and profit-taking pressure, limiting the upside rebound.

Another rally above $70,000 lost momentum due to over $20 million in profits taken per hour.

Some sellers may view this BTC rebound as temporary rather than a reversal.

Currently, with BTC priced at $70,800, approximately 13.5 million addresses are in a loss.

This indicates that a significant portion of users on the network purchased Bitcoin at prices above the current spot price.

Subsequent market trends

Despite short-term pressures, seasoned players in the crypto industry remain structurally optimistic in the long term.

Strategy founder Michael Saylor said that Bitcoin likely hit its bottom near $60,000 in early February, when forced sellers were washed out of the market. The bottom was determined more by seller exhaustion than by valuation.

He believes current selling pressure is limited, as ETF inflows are absorbing daily supply, and corporate treasury allocations to Bitcoin are generating sustained demand. Michael Saylor predicts that the next bull market catalyst will be the formation of a banking and digital credit system built on Bitcoin, transforming it from a non-yielding asset into a capital markets engine.

BitMEX founder Arthur Hayes stated at the end of March, "There is currently a lot of fantasy about future bullish prospects in the market; of course, I hope the bloodshed ends, but I won't be buying risk assets here."

Tom Lee posted that there are increasing signs the market has formed a bottom, even though overall market sentiment remains largely skeptical. If you still have doubts, consider buying assets that performed best during the U.S.-Iran war.