Bitcoin price falls under $71K as US-Iran war tensions spark sell-off

Bitcoin (BTC) fell 3% to trade below $71,000 into Sunday’s weekly close after negotiations to end the US-Iran war broke down.

Key points:

• Bitcoin shed its gains as negotiations between the US and Iran broke down.

• The Strait of Hormuz becomes a flashpoint again as US President Donald Trump demanded that it be reopened.

• BTC price downside punishes late long positions.

BTC price drops on US-Iran war fears

Data from TradingView showed BTC price action dipping below $71,000 after news of a sudden breakdown in negotiations between the US and Iran in Islamabad, Pakistan.

A failure to reach an agreement on the issue of nuclear weapons resulted in both delegations leaving talks unfinished. Later, US President Donald Trump said that the US would blockade the Strait of Hormuz and “interdict” vessels paying Iran for safe passage.

“No one who pays an illegal toll will have safe passage on the high seas,” he wrote in a post on Truth Social.

A follow-up post repeated demands that Iran make Hormuz, a major oil transit route, fully operational.

Ahead of futures markets opening, reactions to the latest events spelled out the risks for the wider economy.

“If the path forward is continued war, escalation, and a prolonged closure of the Strait of Hormuz, then the Iran War has just entered a new era,” The Kobeissi Letter wrote in its latest analysis on X. 

Kobeissi referred to the US Consumer Price Index (CPI) inflation, a gauge particularly sensitive to oil prices. Earlier this week, the March CPI print came in slightly below expectations, despite the highest jump in its oil-price component in 60 years.

“There are currently no plans for additional talks, according to Iranian media,” Kobeissi added. 

Bitcoin liquidations mount as longs suffer

As the only 24-hour-traded asset class, Bitcoin and crypto were the only ones reacting to the chaos in real time.

Related: Bitcoin analysis sees $55K BTC price 'iron bottom' by December 2026

Data from CoinGlass showed BTC/USD slicing through long liquidations, with the liquidation total for the past 24 hours nearing $350 million.

“Volatility remains high and it's clear that there won't be a path forward where risk-on assets will do well if this continues to be the consensus,” trader Michaël Van de Poppe wrote in an X response.

Van de Poppe suggested that the economic weakness as a result of the returning war could force the Federal Reserve to inject liquidity despite rising inflation.

“On a larger scale, I think that we're currently in a sufficiently weak economy and the FED has no other option than to start printing again to positively influence the economy,” he argued.

Earlier, Cointelegraph reported on rising odds of the US entering a recession in 2026.

Next week will bring more inflation cues from the March Producer Price Index (PPI) print, while multiple senior Fed officials will speak on the economy.