Bitcoin has maintained its position above $77,000, following a notable surge to its highest level since early February. The cryptocurrency's 13.6% increase in April positions it for its strongest monthly performance in a year, according to data from CoinGlass.
This rebound follows a prolonged downturn in crypto markets, which experienced their longest losing streak since 2018 from October to February. The improvement in the broader macroeconomic landscape, including a strong recovery in US 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 US dollar, serve as liquidity in crypto markets, indicating capital inflow and a positive signal for asset prices. Despite ongoing geopolitical tensions and uncertainty surrounding the Iran war, which have kept oil prices elevated, markets appear to be looking beyond these concerns for now. Jasper de Maere, an OTC trader at Wintermute, observed that strong corporate earnings and the resilience of equity markets are offsetting concerns about higher energy costs and geopolitical risks.
The upcoming FOMC meeting will be a crucial test for bitcoin, which is currently hovering near the top of its trading range. The ability to break through the $79,000 level, considered structurally significant due to heavy institutional overhead supply, will depend on the drivers of the move and the participation of institutional buyers.
A breakout backed by sustained institutional demand could mark a more durable shift, while a move driven mainly by short covering may fade once momentum cools.