Traders Push Bitcoin Near $79,000 Resistance, Wiping $120M in Bearish Positions

After a 13% gain in April, Bitcoin spiked over $2,000 on the first day of May to reach an intraday peak of $78,924 before ultimately settling below $78,300.

Key Takeaways:

Bitcoin surged over $2,000 on May 1 to test $79,000 resistance after a 13% gain in April.

Bitcoin’s jump triggered $120 million in short liquidations as market cap hit $1.57 trillion.

Analysts warn that Federal Reserve policy shifts may trigger volatility in high-value assets.

Geopolitical Friction

After ending April with gains exceeding 13%, Bitcoin kicked off the new month on a high, rising by more than $2,000 at one point to test the $79,000 resistance. According to the daily chart, bitcoin—which traded just below $76,500 late Thursday—spiked to $77,340 just minutes before midnight.

The leading cryptocurrency then oscillated between $77,000 and $77,500 throughout early Friday. A second rally saw it reach an intraday peak of $78,924 around 9 a.m. EDT before quickly reversing some gains. At the time of writing (12:30 p.m.), bitcoin was trading near $78,300, a 2.6% gain over 24 hours.

Bitcoin’s surge on May 1 pushed its market capitalization from $1.52 trillion on Wednesday to nearly $1.57 trillion. Bitcoin’s Friday jump triggered the liquidation of $120 million in short bets—more than half of the $217 million in short positions liquidated across the crypto economy over 24 hours.

Like U.S. equities, the rebound was seemingly driven by reports that Iran had submitted a fresh proposal to Washington via Pakistani mediators. However, President Donald Trump appeared to reject the proposal while speaking to reporters at the White House, noting that while Tehran’s leadership has expressed a willingness to reach a negotiated settlement, internal infighting makes a resolution impossible.

While news of a possible diplomatic opening pulled Brent crude oil prices below $110 per barrel, commentators warn the drop is temporary as long as the Strait of Hormuz remains closed. This suggests gasoline prices will likely remain elevated—a scenario expected to challenge Trump and the Republican Party in the upcoming midterm elections.

Meanwhile, markets are increasingly recognizing that Middle East risks may not dissipate soon. Although U.S. officials claim “hostilities have ended,” Trump suggested the ceasefire could still be abandoned. With Israel warning of renewed strikes on Iran and unresolved military pressure around the Strait of Hormuz, the current ceasefire resembles a temporary delay rather than a durable resolution.

Although bitcoin continues to seemingly benefit from residual risk appetite and institutional inflows, a Bitunix analyst warns that if global markets rotate from a soft landing narrative toward a stagflation trade, volatility across high-valuation assets could expand materially. The analyst added that if markets conclude the Federal Reserve is losing policy flexibility and directional clarity, liquidity expectations may again become the dominant pressure point for risk assets.