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 has positioned the cryptocurrency for its strongest monthly performance in a year, with a 13.6% increase in April, according to data from CoinGlass. The rebound comes after a prolonged period of decline, with crypto markets experiencing their longest losing streak since 2018. The improvement in the broader macroeconomic landscape, including a strong recovery in US equities, has contributed to this turnaround.
Furthermore, the supply of Tether's USDT stablecoin has increased by approximately $5 billion over the past two weeks, reaching nearly $150 billion. This growth in stablecoin supply is seen as an indicator of increased liquidity in crypto markets, which can drive asset prices upwards. Analysts view the expansion of stablecoins as a sign of capital flowing into the crypto market. Despite persistent geopolitical uncertainties, including the situation in the Middle East and the impact on oil prices, markets appear to be looking beyond these concerns for now.
Strong corporate earnings and the resilience of equity markets are offsetting worries about higher energy costs and geopolitical risks, according to Jasper de Maere, an OTC trader at Wintermute. De Maere noted that markets seem to have become fatigued and complacent regarding intricate headlines about the conflict. The upcoming Fed meeting in April will be a crucial test for the current rally.
If institutional demand continues to drive the move, bitcoin may break through the $79,000 level, which could mark a significant shift. However, if the momentum cools, the cryptocurrency may revert to the $75,000-$77,000 range.