Bitcoin has maintained its position above $77,000, following a notable surge to its highest level since early February. This upward trend puts the cryptocurrency on course for its most substantial monthly gain in a year, with a 13.6% increase in April, according to data from CoinGlass.
The rebound marks a significant turnaround from the prolonged losing streak experienced by crypto markets, which had been on a decline 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 shift. Additionally, the growth of Tether's USDT, the largest stablecoin, to nearly $150 billion, with an increase of approximately $5 billion over the past two weeks, has acted as a crypto-specific driver.
This expansion in stablecoin supply is seen as an indicator of liquidity and capital flow into the crypto market, which can positively impact asset prices. However, geopolitical uncertainties, such as the situation in the Middle East and the Iran war, continue to pose risks. Despite these concerns, markets appear to be looking beyond them, with strong corporate earnings and resilient equity markets offsetting worries about higher energy costs and geopolitical risks, as noted by Jasper de Maere, an OTC trader at Wintermute.
The upcoming Fed meeting in April will be a crucial test for the current rally, with the potential to either sustain or fade the momentum, depending on the drivers of the move and the participation of institutional buyers.