Bitcoin has maintained its position above $77,000, following a notable surge to its highest level since early February. This upward trend puts the cryptocurrency on track for a 13.6% gain in April, its best monthly performance in a year, according to data from CoinGlass. The rebound comes after a challenging period, marked by the longest losing streak in crypto markets 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 seen as a key driver. This expansion in stablecoin supply acts as a liquidity injection into crypto markets, signaling potential capital inflows and a positive indicator for asset prices.
However, geopolitical uncertainties, such as the Middle East tensions and the Iran war, continue to pose risks. 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, according to Jasper de Maere, an OTC trader at Wintermute.
De Maere suggests that markets have become fatigued and complacent regarding intricate headlines on the conflict. The upcoming April Fed meeting will be a crucial test for whether the current rally can be sustained. Institutional demand and the direction of the move will be key factors in determining if bitcoin can break through the $79,000 level, which is seen as a significant structural barrier due to heavy institutional overhead supply just above it.