Bitcoin Bulls Defend $80,500 Support, Driving 7% Weekly Surge to $1.63 Trillion Cap

Bitcoin surged past the $81,000 milestone for the first time in months, reaching an intraday peak of $81,714. Despite brief periods of volatility, the cryptocurrency maintained strong support above $81,500, marking a 7% weekly gain.

Key Takeaways:

• Bitcoin hit $81,714 on May 5 as the Trump administration worked to de-escalate Middle East tensions.
• The rally triggered $202 million in short liquidations, pushing the crypto market cap to $2.77 trillion.
• While the Strait of Hormuz remains a concern, President Trump’s ceasefire is expected to stabilize oil.

Geopolitical Influence

After breaching $81,000 for the first time in months early May 5, buoyed by the Trump administration’s downplaying of Monday skirmishes in the Strait of Hormuz, bitcoin briefly retreated before establishing support just above $80,500. However, the sell-off lasted only a few hours; by 9 a.m. EST, the cryptocurrency was back on the ascendancy, reaching an intraday peak of $81,714.

Despite two more sharp declines and rapid rises, sell pressure dissipated each time the price retreated, keeping bitcoin above $81,000. At the time of writing, bitcoin was back above $81,500, representing a 24-hour gain of 1.6% and nearly 7% over a week. This gain lifted bitcoin’s market capitalization to $1.63 trillion, which helped push the total crypto economy’s market cap to $2.77 trillion.

While the sudden kinetic exchanges between U.S. forces and the IRGC sent a tremor through global markets, the shockwaves were largely absorbed by the Trump administration’s diplomatic stance. President Donald Trump’s firm assertion that the ceasefire remains “fully operational” signaled to institutional investors that Washington has little appetite for a broader regional conflict.

Although the precarious status of the Strait of Hormuz remains a source of long-term anxiety, the immediate market consensus was one of profound relief that a cycle of retaliatory violence had been sidestepped.

The cooling of tensions was most visible in the energy sector. Crude prices, which had initially spiked by 5% following reports of targeted strikes on the Fujairah oil zone terminal in the United Arab Emirates, saw those gains evaporate in real-time. According to market data, Brent Crude dropped to $109 per barrel while WTI slipped to $102 per barrel.

Bitcoin’s Tuesday jump left short traders licking their wounds, as $123 million in short bets were liquidated over 24 hours. In contrast, approximately $9 million in long bets were liquidated during the same period. Overall, more than $202 million in shorts were liquidated compared to $57 million in longs.

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