Bitcoin has maintained its position above $77,000, following a significant surge to its highest level since early February. The cryptocurrency's 13.6% increase in April puts it on track for its best monthly performance in a year, according to CoinGlass data, rebounding from a prolonged downturn that saw crypto markets experience their longest losing streak since 2018.
The improvement in the broader macroeconomic landscape, marked by a strong recovery in U.S. equities with the S&P 500 and Nasdaq reaching record highs, has contributed to the turnaround. Additionally, the growth of Tether's USDT, the largest stablecoin, to nearly $150 billion, with an increase of about $5 billion over the past two weeks, is a significant driver.
This surge in stablecoin supply acts as a liquidity indicator in crypto markets, signaling capital inflows and a positive outlook for asset prices. Markets appear to be disregarding geopolitical risks, with Jasper de Maere, an OTC trader at Wintermute, stating that equities and crypto markets have stopped reacting to intricate headlines about the Iran conflict, possibly due to fatigue and complacency. Strong corporate earnings and resilient equity markets are offsetting concerns about higher energy costs and geopolitical risks. The upcoming April Fed meeting will be a crucial test for bitcoin, which is currently hovering near the top of its trading range, with the $79,000 level proving to be a significant cap.
Whether bitcoin can break through this level will depend on the driving forces behind the move and the participants involved. A breakout supported by sustained institutional demand could mark a durable shift, while a move driven mainly by short covering may fade once momentum cools.