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 puts it on track for its best monthly performance in a year, according to data from CoinGlass.
This rebound follows a period of decline, with crypto markets experiencing their longest losing streak since 2018, including consecutive monthly declines from October to February. The improvement in the broader macroeconomic environment, including a strong recovery in US equities, has contributed to this turnaround. The S&P 500 and Nasdaq have reached record highs after briefly entering correction territory earlier in the year. A significant factor in this move is the growth of Tether's USDT, the largest stablecoin, which has increased its supply to nearly $150 billion, adding around $5 billion over the past two weeks.
This growth is important because stablecoins, being tied to fiat currencies like the US dollar, serve as a source of liquidity in crypto markets, signaling the flow of capital into the crypto market and potentially indicating a positive trend 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. According to Jasper de Maere, an OTC trader at Wintermute, strong corporate earnings and resilient equity markets are offsetting concerns about higher energy costs and geopolitical risks, leading to a certain level of fatigue and complacency in the markets.
The upcoming FOMC meeting will be a crucial test for the current rally, with the ability of bitcoin to break through the $79,000 level dependent on the drivers of the move and the participants involved. A breakout supported by sustained institutional demand could mark a more durable shift, while a move driven mainly by short covering may fade once momentum cools.