Bitcoin has maintained its position above $77,000, following a significant surge earlier in the week to its highest level since February. This upward trend puts the cryptocurrency on track for a 13.6% increase in April, its best monthly performance in a year, based on data from CoinGlass.
The rebound comes after a challenging period for crypto markets, which experienced their longest losing streak since 2018, with consecutive monthly declines from October to February. The improvement in the broader macroeconomic landscape, including a strong recovery in U.S. equities with the S&P 500 and Nasdaq reaching record highs, has contributed to this turnaround. Additionally, the growth of Tether's USDT, the largest stablecoin, to nearly $150 billion, with an increase of about $5 billion over the past two weeks, is a crypto-specific factor driving this move.
Stablecoins, being tied to fiat currencies like the U.S. dollar, serve as liquidity in crypto markets, indicating capital flow into the crypto market and a positive signal for asset prices. However, geopolitical uncertainties, particularly regarding the Iran war, continue to affect oil prices.
Markets seem to be overlooking these concerns for now, with strong corporate earnings and resilient equity markets offsetting worries about higher energy costs and geopolitical risks, as noted by Jasper de Maere, an OTC trader at Wintermute. The upcoming April Fed meeting will be a crucial test for whether the current rally can be sustained, with institutional demand playing a significant role in determining the durability of the shift. If ETF inflows persist through this event, the $79,000 level could transition from resistance to support, potentially leading to a higher trading range for bitcoin.