American poet Charles Bukowski famously said: «The crowd is always wrong,» and his words seem to sum up the situation in the financial markets perfectly.

Just 24 hours ago, social media was abuzz with fears that the U.S. airstrike on Iran’s nuclear sites, combined with the talk of Iran mulling the closure of the Strait of Hormuz, will trigger a massive surge in oil prices, leading to a slide in stocks and cryptocurrencies.

The reality, however, has turned out to be different. Oil prices on both sides of the Atlantic gapped higher by just 3% and have since erased most of the gains, according to data source TradingView.

As of writing, a barrel of Brent oil changed hands at $77, up just 1.4% for the day. Prices gapped higher to hit a five-month high of $77.79. Similarly, the West Texas Intermediate crude (WTI) hit a high of $78.58 before falling back to $76.75.

Meanwhile, bitcoin BTC, the leading cryptocurrency by market value, has risen back above $101,000, having hit lows under $98,000 on Sunday when fears of an oil price spike led to the short-term Deribit-listed BTC puts trading at an 8%-10% volatility premium to calls. Futures tied to the S&P 500 traded just 0.3% lower.

The largely muted reaction in oil prices suggests that the market doesn’t expect Iran to follow through on its threats and block the Strait of Hormuz, which could destabilize its key allies in Asia, particularly China.

«Price action this morning suggests that the market doesn’t believe (at least not yet) that flows through Hormuz will be blocked. Brent is back below $80/bbl after briefly spiking above this level earlier in the trading session,» analysts at ING said in a report to clients Monday.

«With more than 80% of oil flows through Hormuz ending up in Asia, the impact on the region would be larger than that on the US. Therefore, Iran would want to be careful in upsetting the likes of China by disrupting oil flows,» ING added.

According to energy market expert Anas Alhajji, Iran’s threat to close the Strait is largely a rhetorical tactic for domestic consumption, which it has employed at least 15 times since the 1980s. Alhajji explained the same in a post on X, revisiting the 2018 thread that detailed how blocking the strait is easier said than done.

«For Iran to close the Strait, it means occupation and the taking over of Oman’s waters where most ships go through. This will immediately invoke the defence pact of the GCC: it means war among all,» the thread said, adding that a potential closure would hurt Iran’s friends more than its enemies, which do not import oil from Iran and could circumvent the Strait through two underutilized pipelines.

BTC holds key support

All this means that the much-feared oil price spike may not materialize soon, which could help BTC and other risk assets avoid a sell-off. A big surge in oil would increase the risk of major economies slipping into stagflation, the worst outcome for most assets, including bitcoin.

BTC’s chart shows that bears failed to establish a foothold below the horizontal support at $100,430 on Sunday. Buyers stepped in around that level on June 5, taking prices higher to $110,000 in subsequent days.

Oil’s muted reaction suggests the potential for history to repeat itself. On the flip side, acceptance under the support would shift the focus to the confluence of the 100- and 200-day simple moving averages at around $95,900.