On Friday, Bitcoin held steady above $77,000, following a period of consolidation after reaching its highest level since early February. According to CoinGlass data, the cryptocurrency has seen a 13.6% increase in April, putting it on track for its best monthly performance in a year. This rebound comes after a challenging period, during which crypto markets experienced their longest losing streak since 2018, with consecutive monthly declines from October to February. The improvement in the broader macro backdrop has contributed to this turnaround, with U.S.
equities recovering and the S&P 500 and Nasdaq reaching record highs after briefly entering correction territory earlier in the year. Additionally, the supply of Tether's USDT, the largest stablecoin, has increased to nearly $150 billion, with a $5 billion surge over the past two weeks, following a period of stagnation. This growth in stablecoins, which act as liquidity in crypto markets, is often seen as a sign of capital flowing into the crypto market, which can have a positive impact on asset prices. Despite ongoing geopolitical tensions in the Middle East and uncertainty surrounding the Iran war, which have kept oil prices elevated, markets appear to be looking past 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. De Maere noted that the equities and crypto markets seem to have become desensitized to intricate headlines about the conflict's direction, indicating a level of fatigue and potential complacency. The next test for bitcoin will come with the April Fed meeting, which could determine whether the current rally will hold. If ETF inflows continue through this event, the $79,000 level could transition from resistance to support, opening the door for a higher trading range.
However, if flows fade, bitcoin may slip back into the $75,000-$77,000 range.