Bitcoin has maintained its position above $77,000, following a notable surge to its highest level since early February. This upward trend has positioned the cryptocurrency for its strongest monthly performance in a year, with a gain of approximately 13.6% in April, based on data from CoinGlass. The recovery 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 rebound 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 significant driver. This expansion in stablecoin supply acts as a liquidity boost in crypto markets, often interpreted as a sign of capital flowing into the crypto market, which is positive for asset prices. However, geopolitical uncertainties, such as the situation in the Middle East and the impact of the Iran war on oil prices, continue to pose risks. According to Jasper de Maere, an OTC trader at Wintermute, markets appear to be overlooking these geopolitical concerns for now, focusing instead on strong corporate earnings and the resilience of equity markets.
De Maere notes that this shift in focus may indicate a level of fatigue or complacency. The upcoming Fed meeting in April will be a crucial test for whether the current rally can be sustained, with the potential for ETF inflows to either support a higher trading range or lead to a decline back to the $75,000-$77,000 range, depending on the level of institutional demand.