One of the biggest short squeezes of 2026 came and went in a single session.
Bitcoin prices climbed to $78,000 on Friday night, triggering $762 million in liquidations from 168,336 traders, of which $593 million were short, CoinGlass reported.
By late Saturday in Asia, Bitcoin had fallen back to $76,091, up just 0.8% on the day, as Iran announced that the Strait of Hormuz was once again closed to maritime traffic less than 24 hours after its foreign minister declared it fully open.
Two tanker owners told Bloomberg that their vessels received Iranian radio signals that closed the waterway, with one of the supertankers reporting gunfire and suspending shipping.
State news agency Noor said the Strait of Hormuz had been restored to “strict management and control by the armed forces” in response to the U.S. blockade of Iranian shipping. On Friday, several oil tankers were heading into the strait after news of the initial reopening broke.
Friday’s breakout rally culminated in a $590 million short rout, with Bitcoin short positions accounting for the largest share of liquidations at $381 million, followed by Ethereum short positions at $167. Shorts outnumbered bulls at nearly four to one, making it the cleanest short-to-long collapse in a liquidation event since February.
The setup has been established for weeks. The funding rate for Bitcoin perpetual contracts is fixed at a negative value, meaning shorts need to pay a premium to longs to maintain their positions.
The reopening of the Strait of Hormuz on Friday was the catalyst for a turnaround. Crude oil prices fell nearly 10% to $85.90 a barrel on the initial headlines, while Bitcoin broke above the $76,000 to $78,000 area that has capped every rebound attempt since the February 5 crash.
President Donald Trump told reporters Friday night that Iran had agreed to an “indefinite” suspension of its nuclear program, but Tehran has never confirmed that claim.
None of these survived intact until Saturday.
The market pattern is familiar now, with ceasefire headlines fueling the rally, but then reversal headlines before the breakout consolidates. Forced expansion requires another setup to combat.
Ethereum outperformed Bitcoin during the decline, falling just 0.2% in 24 hours, while Solana fell 1.3% and Dogecoin fell 2.1%. On a weekly basis, Ethereum is still up 5.2%, XRP is up 6.4%, BNB is up 4.6%, and Bitcoin is up 4.5%.
Whether the $76,000 area can hold Monday’s opening is now a question. Even if peaceful trade continues to be turbulent, a clean weekly close above $76,000 would maintain a structural breakout.
After falling below that level, Bitcoin is back in the same range it has been stuck in since March, only this time, the short base has just been wiped out and is looking to rebuild.
