Bitcoin rose to as high as $72,700 on Wednesday. Traders cheered the news of a ceasefire agreement between the U.S. and Iran. However, optimism was shattered within hours as new violence erupted in the Middle East, causing it to drop back below $71,000.

There was indeed an increase, but it did not last long enough to have significant meaning.

The Strait of Hormuz remains blocked, oil prices rebound

Israel has launched its largest attack on Lebanon to date, striking over 100 Hezbollah positions across Beirut in under 10 minutes. The Speaker of the Iranian Parliament has already stated that three ceasefire clauses have been violated. As a result, WTI crude rose by 2.8% to $97.03 per barrel, while Brent crude increased by 2.5% to $97.14 per barrel, recovering most of the 16% decline from the previous session.

Typically, about 135 ships pass through the Strait of Hormuz each day, but only 3 passed on Wednesday. Over 800 ships are still stuck in the Gulf waters waiting for clear guidelines for safe navigation.

The price of Ether fell by 1.1% to $2,185. This was the result of following Bitcoin's decline, due to an overall weakening of risk appetite. Gold recorded a slight decrease to $4,713. The dollar remained stable, indicating that the market is not yet in a complete panic state.

Market analysts assessed that this rise was driven mostly by algorithm-based or momentum-driven strategies rather than actual fundamental improvements. As geopolitical pressures increased again, the rebound did not last long.

Additional pressure from the Fed

The minutes from the U.S. Federal Reserve's March meeting were released on Wednesday. Policymakers expressed growing concerns about persistent inflation. Some members argued that if oil prices remain high, the Fed may also need to consider raising interest rates.

The long-term blockade of Hormuz will keep energy prices high. The policy shift that the cryptocurrency market has been waiting for from the Fed may be delayed further. High interest rates historically burden risk assets like Bitcoin. The uncertainty of war and hawkish Fed policies make a bull market difficult.

Bitcoin continues to face an uncomfortable macro environment. Expectations for a ceasefire are weakening, and the Fed is not rushing to ease.