Bitcoin has maintained its position above $77,000, following a notable surge earlier in the week to its highest level since February. This upward trend puts the cryptocurrency on track for a 13.6% gain in April, its best monthly performance in a year, according to data from CoinGlass. The rebound comes after a challenging period for crypto markets, which experienced their longest losing streak since 2018 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. A significant factor in the crypto market's resurgence is the substantial growth of Tether's USDT, the largest stablecoin, which has increased by approximately $5 billion over the past two weeks to nearly $150 billion. This expansion in stablecoin supply acts as a liquidity injection into crypto markets, often interpreted as a signal of capital inflow and a positive indicator for asset prices.
However, geopolitical uncertainties, particularly regarding the Iran conflict, continue to pose risks. Despite these concerns, markets appear to be focusing on strong corporate earnings and the resilience of equity markets, leading to a degree of complacency regarding geopolitical risks.
The upcoming Federal Reserve 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 breakout above $79,000 or lead to a retreat back into the $75,000-$77,000 range.