Bitcoin has maintained its position above $77,000, following a notable surge earlier in the week to its highest level since early February. With a 13.6% increase in April, the cryptocurrency is poised for its best monthly performance in a year, according to data from CoinGlass. This 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 US 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, has surged to nearly $150 billion, with an increase of approximately $5 billion over the past two weeks, providing a significant driver for the crypto market. Stablecoins, being tied to fiat currencies like the US dollar, serve as a source of liquidity in crypto markets, signaling capital flow into the market and potentially driving up asset prices. However, despite the current optimism, geopolitical tensions and uncertainty surrounding the Iran war continue to impact oil prices. According to Jasper de Maere, an OTC trader at Wintermute, markets seem to have become less concerned about the intricacies of the conflict, potentially indicating a level of fatigue or complacency.
The strong corporate earnings and resilient equity markets are offsetting concerns about higher energy costs and geopolitical risks. The upcoming FOMC meeting will be a key test for the current rally, with the $79,000 level proving to be a significant structural barrier due to heavy institutional overhead supply. Whether bitcoin can break through this level will depend on the drivers of the move and the participants involved, with sustained institutional demand potentially marking a more durable shift in the market.