Bitcoin plunged below $80,000 on May 7, shedding over 3.3% in a single session, after a top Iranian official dismissed a U.S. proposal to reopen the Strait of Hormuz. The sell-off accelerated a retreat that had already seen BTC give up gains from a $82,600 high earlier in the day, and echoed a stark warning issued just hours earlier by long-time Bitcoin advocate Garrett Jin.
Mohsen Rezaei, an adviser to the late Supreme Leader Ali Khamenei, told Iran's Press TV that the U.S. could not reopen the strategic waterway with "an unrealistic plan" and exit the war without paying reparations. The 14-point U.S. proposal had been intended as the basis for a memorandum of understanding to end the conflict and restore shipping lanes. Rezaei's blunt rejection removed the market's working assumption that a diplomatic resolution was imminent, triggering a swift repricing of risk assets, with Bitcoin bearing the brunt.
The move came just after Garrett Jin, a Bitcoin OG known for his macro analysis, had cautioned that the U.S.-Iran ceasefire was a "disguised peace" that failed to address underlying tensions. In a Blockbeat report, Jin pointed to hidden cracks in the credit market—increasing loan loss provisions at major banks, Berkshire Hathaway's record cash reserves, and Spirit Airlines' bankruptcy—as signs that institutional investors were bracing for a downturn. "Market rallies can sometimes obscure deeper vulnerabilities," Jin warned, predicting that the coming earnings season could be a "day of reckoning" if credit stresses materialized.
On the charts, Bitcoin's breakdown was decisive. The price sliced through the 100-hour moving average at $80,592, which had held as support repeatedly, and fell to $79,819 on Binance. The 50-hour MA at $81,306 now acts as overhead resistance, and the 200-hour MA at $78,983 remains the only structural floor. The hourly RSI (14) dropped to 30.45, near oversold territory that often precedes a short-term bounce, but the catalyst remains unresolved. A daily close below the 200-hour MA within 48 hours would signal that the reversal has legs, opening a path toward the $75,000–$76,000 zone from February's lows. Conversely, reclaiming the broken $80,592 level on strong volume would indicate that buyers see the Iran statement as a temporary headline.
Both Jin's warning and the Iranian official's comment highlight how fragile the current rally is. While Bitcoin's price had been trending higher, underlying geopolitical risks and credit market stress suggest that the current bull run may be built on fragile ground.
