Bitcoin has maintained its position above $77,000, following a significant surge to its highest level since early February. With a 13.6% increase in April, it is on track for its most impressive 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 backdrop, including a strong recovery in US equities, has contributed to this turnaround. The S&P 500 and Nasdaq have regained record highs after briefly entering correction territory earlier in the year.
A crypto-specific factor driving this move is the substantial growth in Tether's USDT, the largest stablecoin, which has increased its supply to nearly $150 billion, adding approximately $5 billion over the past two weeks. This growth in stablecoins, which act as liquidity in crypto markets, is often seen as an indicator of capital flowing into the crypto market, signaling a positive trend for asset prices. However, geopolitical tensions and uncertainty surrounding the Iran war continue to affect oil prices.
According to Jasper de Maere, an OTC trader at Wintermute, markets seem to be overlooking these concerns, with strong corporate earnings and resilient equity markets offsetting worries about higher energy costs and geopolitical risks. De Maere notes that this could be a sign of market fatigue and complacency. The upcoming Fed meeting in April will be a crucial test for the current rally. If institutional demand persists, bitcoin may break through the $79,000 resistance level, potentially leading to a higher trading range.
Conversely, if demand fades, bitcoin may return to the $75,000-$77,000 range.