Brent crude futures dropped 19.24% on April 8 after the US-Iran ceasefire removed the war premium from oil price in a single session. Then violations, and a loaded threat from Trump, pulled it 8.45% back up.
The whiplash created the widest two-day range since the conflict began in February. Meanwhile, a hidden bullish divergence on the daily chart and a short-covering pattern in open interest suggest the bounce may have more room to run. Whether oil price reclaims $100 or rolls back toward $90 depends on which force wins between diplomacy and escalation.
A 19% Drop, an 8% Bounce, and a President Who Says the Guns Stay Loaded
Brent crude futures fell from roughly $111 on April 7 to a low of $90.34 on April 8, a 19.24% single-day decline triggered by the Pakistan-brokered US-Iran ceasefire. The market priced in an end to the Strait of Hormuz disruption within hours.
That pricing lasted less than a day. Gulf nations reported attacks during the first 24 hours of the truce, and Iran attached conditions to its commitment to reopen the strait. Oil price responded immediately, bouncing 8.45% from the low as the ceasefire’s credibility crumbled.
Then Trump weighed in. Late on April 8, the President posted on Truth Social that all US military assets, including ships, aircraft, and personnel, will remain in place around Iran until a final agreement is fully complied with. He added that if compliance fails, the response would come back “bigger, and better, and stronger than anyone has ever seen before.”
Beneath the geopolitical whiplash, the daily chart carries a technical signal. Between March 10 and April 8, Brent crude made a higher low while the Relative Strength Index (RSI), a momentum indicator measuring the speed of price changes, made a lower low. This is a hidden bullish divergence, a signal that the underlying uptrend may continue despite the surface-level chaos.
Open interest tells a similar story. Since late March, open interest has been declining during price rallies, a pattern consistent with short covering rather than fresh buying. The previous rallies between March 2-9 and March 19 onward both coincided with falling open interest. The current bounce fits the same template.
The technical signals lean bullish. But technical signals in a war-driven market need confirmation from positioning data. The options market provides that next layer.
BNO Options Still Lean Bullish but Hedging Activity Rises
The United States Brent Oil Fund (BNO) put-call ratio, which compares bearish put options to bullish call options, shows that bulls still dominate but with slightly less conviction than before the crash.
On April 6, before the ceasefire, the volume ratio sat at 0.15 and the open interest ratio at 0.29. Both readings were extremely bullish, meaning call activity outpaced puts by a wide margin. By April 8, after the crash and bounce, the volume ratio had doubled to 0.32 while the open interest ratio edged down to 0.27.
The doubling of the volume ratio suggests some traders added hedges via puts after the 19% drop. However, 0.32 remains well below 1.0, meaning calls still dominate puts by roughly 3 to 1. The open interest ratio dipping from 0.29 to 0.27 also hints that some long positions may have been liquidated during the crash.
Implied volatility sits at 90.58% with an IV percentile of 91%, meaning options are pricing in more turbulence ahead. The market expects more large moves. The direction of those moves depends on whether the ceasefire holds or fractures further.
With the RSI divergence, short covering, and options positioning all leaning bullish, the oil price chart becomes the final decider.
Oil Price Levels That Determine the Next Move
Brent crude trades at $96.86 inside an ascending channel that has been intact since late February. The April 8 crash touched the lower trendline near $90.34 and the 50-day EMA at $89.81. Both held. The channel survived its deepest test since formation.
The key level on the upside is $100.45 at the 0.382 Fibonacci level. This zone aligns closely with the 20-day EMA at $100.29. The last time oil price properly reclaimed the 20-day EMA was January 8, and the rally that followed did not lose steam until the ceasefire announcement. A daily close above $100.45 would signal that the bounce has graduated from short covering to renewed trend strength and could push prices toward $112.34 at the 0.618 level and $120.82 at the 0.786 level.
On the downside, $93.08 at the 0.236 level is the first support. Below that, $90.34 at the April 8 low is the floor. A break below $90 would take Brent outside the ascending channel, turning the structure from bullish to neutral. That would expose $81.18.
The broader implications extend beyond oil. If Brent reclaims $100 and pushes higher, the petrodollar effect strengthens as oil-importing nations need more dollars to pay for crude. A stronger dollar would pressure gold, silver, and risk assets including crypto. If oil falls below $90 on a successful ceasefire, the reverse could play out.
$100.45 separates a 20-day EMA reclaim with a path back toward $112.34 from a failed bounce that retests $90 and the channel’s lower boundary.
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