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, marking its most significant monthly increase in the past year, according to data from CoinGlass. The rebound occurs after a prolonged period of decline, with crypto markets experiencing 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. Furthermore, the growth in Tether's USDT stablecoin supply to nearly $150 billion, with an increase of approximately $5 billion over the past two weeks, is a significant driver. This expansion in stablecoin supply acts as a liquidity injection into crypto markets, often interpreted as a signal of capital flowing into the market, which can positively impact asset prices.
However, geopolitical tensions, particularly those related to the Iran conflict, continue to pose risks. Despite these concerns, markets seem to be looking beyond them, with strong corporate earnings and resilient equity markets offsetting worries about higher energy costs and geopolitical risks, according to Jasper de Maere, an OTC trader at Wintermute.
The upcoming Fed 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 or hinder the price of bitcoin.