Bitcoin is maintaining its position above $77,000, following a significant surge to its highest level since early February. This upward trend puts the cryptocurrency on track for its most substantial monthly gain in a year, with a 13.6% increase in April, according to data from CoinGlass.
The recovery follows a prolonged period of decline, with crypto markets experiencing their longest losing streak since 2018. The turnaround is attributed to an improved macroeconomic backdrop, with US equities, including the S&P 500 and Nasdaq, reaching record highs after a brief correction earlier in the year. A key factor driving this growth is the substantial increase in Tether's USDT stablecoin supply, which has grown by approximately $5 billion over the past two weeks to nearly $150 billion.
This surge in stablecoin supply is seen as an indicator of increased liquidity in crypto markets, signaling potential capital inflows and a positive outlook for asset prices. However, geopolitical risks persist, with ongoing tensions in the Middle East and elevated oil prices. Despite these concerns, markets appear to be looking beyond the conflict, with strong corporate earnings and resilient equity markets offsetting worries about higher energy costs. The upcoming Fed meeting will be a crucial test for the current rally, with the potential for a breakout above $79,000 dependent on sustained institutional demand.