Crypto markets rally as Trump’s Hormuz comments trigger $400M short liquidations

Crypto markets moved higher on 17 April after Donald J. Trump said the Strait of Hormuz remains open for "full passage," easing fears of a broader supply disruption amid ongoing tensions with Iran. The reaction was swift across digital assets, with Bitcoin and major altcoins posting gains as traders repositioned around a perceived reduction in geopolitical risk. Trump signals open passage despite Iran-focused blockade In a post shared earlier in the day, Trump stated that the Strait of Hormuz is "completely open and ready for business," while noting that a naval blockade would remain in place as it pertains to Iran. The Strait of Hormuz is a key global energy chokepoint, handling a significant share of the world's oil shipments. The disruption to its operations in the past few weeks has raised concerns around supply shocks, inflation, and broader market instability. Trump's comments appeared to ease immediate concerns around the disruption, even as tensions in the region persist. Crypto markets turn risk-on Following the statement, crypto markets showed a broad-based rally. Bitcoin rose by over 4%, while Ethereum gained more than 5%, with other major assets, including Solana and XRP, also posting notable increases. Market heatmaps showed widespread gains, suggesting a shift toward risk-on sentiment among traders. The move suggests that participants interpreted the update as reducing near-term macro uncertainty. This has prompted renewed appetite for higher-risk assets such as cryptocurrencies. Short positions unwind amid volatility A sharp wave of liquidations in the derivatives market accompanied the rally. Data showed that over $400 million in short positions had been wiped out in a short period. Bitcoin alone accounted for more than $130 million in liquidations, followed by Ethereum at over $60 million, according to market data. Such events typically occur when rapid price increases force leveraged bearish positions to close, further accelerating upward momentum, often described as a short squeeze. Final Summary Crypto markets rallied after Trump signaled that the Strait of Hormuz remains open, easing fears of a broader supply disruption. The move triggered over $400M in short liquidations, reinforcing bullish momentum as traders unwound bearish positions.